There is no better time to tell the ‘Africa Rising’ story than now. The rise is very obvious in the African hospitality sector, which has recorded and is sustaining impressive results year-on-year in the last five years.
In 2018, about 67 million tourists visited Africa, representing a rise of 7 percent from a year earlier, making the continent the second fastest growing region in tourism, after Asia Pacific.
That record was broken in 2019 when over 70 million visited the continent, while 134 million visitors are expected in 2030, according to United Nations World Tourism Organisation (UNWTO), forecast.
Of course, the growth potential of Africa is increasingly recognised by international hotel operators, investors and developers.
The huge inflow of tourists could be a pointer to the fact that African countries are now reaping the benefits of positive policy changes, which has sparked investments in hotels.
Thus, positively impacting the African hospitality sector with hotels engaged in projects in order to carter to the growing demand of high quality accommodation and offerings.
Whilst the likes of Marriott, Hilton, Radisson, and Accor Group is reported to lead international hotel offerings in the continent with over 60 percent of the market share, some indigenous African hospitality management brands are gaining grounds at closing the gap.
Today, a growing number of Africans, especially the middle-class and young travelers are beginning to identify with more indigenous brands because of their exceptional understanding of the African consumer needs, comparable services of global standards rivalling the expensive ‘international’ options.
Magani Bulami, a welltravelled South African business executive, notes that sometimes, it is the name that is the difference in the offerings of international and indigenous hotel brands in Africa.
“While the Protea brand lasted, it was one of the indigenous hotel brands I patronized because of its great offerings. Today, I have switched to Legacy Group brands as I do not see the difference with the likes of what Hilton and Marriott hotels are offering that our indigenous Legacy cannot”, Bulami says.
Though the Protea Hotel Group, a 116-hotel group spanning seven African nations, has ceased to be the foremost indigenous African hotel brand since its acquisition by Marriott International, there are still other indigenous brands that are giving foreign brands a run for their money.
For instance, Tsogo Sun, an enterprising African hotel brand, which runs a portfolio of more than 90 hotels and casinos across Africa, is keen on further expanding across the continent and even beyond because of its African themed offerings, which appeal to a growing number of guests across the continent.
Still from South Africa, Sun International, another great indigenous brand, is doing quite well in the luxury hotel and resort offerings. A visit to Table Bay Hotel by the Ocean bank in Cape Town, Sun City, The Maslow among other outlets of Sun International, leaves visitors with great experiences and lasting memories.
Legacy Group has been quite impressive as well. with footprints across Southern Africa and the rest of Africa, including Nigeria and Ghana. Indeed, the indigenous hotel group has given most foreign brands a run for their money with the world class services served with African flavor.
It is all about world-class offerings at Michael Angelo in Sandton, Labadi Beach in Accra, among other great resorts and hotels across Africa. It was Legacy that made Wheatbaker Ikoyi, Lagos thick until last year when it stopped managing the foremost boutique hotel.
City Lodge with 55 hotels and Three Cities, are among other great indigenous brands that are pushing boundaries in the hotel business in Africa.
In Nigeria, the likes of Citi Height with three hotels, Fahrenheit Hospitality Limited with over four hotels, Primal Hotel with over five hotels, Rockview with about five hotels, among others are not scared by the influx of the international brands. One can say they have a good grasp of their market.
Surprisingly, Mangalis, a new indigenous African hotel group, has joined the race to close the gap in quality offerings. Yerim Sow, a Senegalese entrepreneur, and founder of Mangalis Group, is investing €315m to build 15 hotels across four new brands in West and Central Africa.
In East Africa, Serena Hotels has developed and sustained its unique hospitality tradition, which has been drawing guests in their millions since 1970 when it opened in Nairobi, Kenya. Since then, the indigenous hotel brand has expanded beyond East African countries of Kenya, Tanzania, Rwanda, Uganda, and Mozambique to Asian countries of Pakistan, Afghanistan, and Tajikistan.
With a collection of 36 luxury resorts, safari lodges, and hotels across these locations, Serena Hotel Group is now looking at making its own unique marks, no matter the competition.
Also from Kenya, the Icon Hotel Group is kicking across major destinations in Africa a great example is its Osotua Luxury Resort Naivasha.
A few years ago, over 60 percent of Safari lodges in Africa were owned and managed by foreign brands. Today, the number of indigenous participants is increasing as some rich Africans and corporate organizations are now seeing hospitality as potential investment instead of leaving their money in Swiss banks.
Great Lakes Safari in Uganda is one example. The safari, which is acclaimed one of the best in East Africa, was founded and run by indigenous hands. Amos Wekesa, the founder, employs in excess of 250 staff who run his several safari lodges.
Today, over 80 percent of safari lodges in South Africa are managed by indigenous brands. It is intriguing that international brands find it difficult competing in that segment, for very obvious reasons of the inability to provide rich African hospitality experience, a part of leisure travel that generates about 70 percent of hospital revenue.
Again, it may seem intimidating hearing about hotel development in the pipeline in Africa. In the 11th edition of W Hospitality annual survey, there are over 75,000 rooms in 401 hotels, though a 1.5 percent decrease on the 2018 pipeline. As well. almost 100 hotels opened in Africa in 2017 and 2018, with a total of 16,000 rooms. Although the hotels are mostly international brands.
Trevor Wards, CEO, W Hospitality, assures that there is big hope, huge opportunity and space for all to play. Truly, African hospitality is not afraid of competition as it has its market and making efforts at attracting high-end guests with improvements in quality service and facility offerings in recent times.
For Daniel Idah, general manager of an Abuja-based indigenous hotel, nothing is stopping African hoteliers to soar if foreign brands are profiting here.
“We are not scared of international brands, they have their market, and we have ours. We are gradually closing the gap in quality delivery and guests know that”.
According to a report by Jumia Travels, indigenous brand are still thriving because international chains charge exorbitant rates in foreign currencies, hence many luxurious local brands provide alternative.
“This is a great benefit for the local brands as many local travellers, as well as, middle to low income international travellers will prefer to stay in a good hotel with an affordable price, rather than stay in a fancy hotel for a very high price. The local businesses win here”, Jumia observes. Moreover, with the proposed takeoff of the African Continental Free Trade Area (AFCFTA) in June this year that would ensure free market across the continent, there is going to be more regional travels across Africa, meaning more demands for quality accommodation.
With a single market of about 1.2 billion people and a combined GDP of about $3.5 trillion, AFCFTA is expected to provide enormous trading opportunities for business across Africa including the hospitality sector.
Considering the fact that four out of 10 international tourists in Africa come from the continent itself, AFCFTA will soar the number of regional travels with over 40 million Africans traveling within, wooing investors to build more hotels to provide for the increasing demand for quality accommodation and creating jobs as well.
Already, the hospitality sector contributes about $ 194.2 billion to Africa’s economy, representing 8.5 percent of the continent’s GDP, amid creating 24.3 million African jobs, or 6.7 percent of total employment.
The figures, according to UNWTO forecast, are going to double with 134 million visitors expected by 2030, offering enormous growth opportunities to African hospitality brands that are positioning themselves to reap from the imminent harvest of guests.
Again, closing the huge gap in the market share between them and their foreign counterparts, is becoming a reality as most indigenous brands are fast expanding; thanks to willing local investors.
Already, Tsogo Sun is looking at running more hotel’s in Nigeria, Serena is coming to Ghana, Citi Lodge is stepping out to Angola, among other brand expansion projects across the continent.
Well, it is obvious that indigenous African hospitality brands are coming of age and taking the center stage although it may not yet be time to click the wine glasses as there are more feats to achieve.
The role of micro, small and medium scale enterprises (SMES) cannot be overemphasised given their relevance in resource mobilisation, utilisation and overall contribution to gross domestic product (GDP) of a nation.
They serve as the engine of economic growth and development, and respond to the macro economic problems militating against developing nations like Nigeria.
Aba, the commercial hub of Abia State, has one of the largest concentrations of MSMES and a bulk of this number are engaged in leather works, steel fabrication and garment making, which could be attributed to the popularity of the city.
A survey carried out by the United Nations revealed that the Aba leather cluster consists of 11,000 enterprises with 23,000 employees, earning an annual turnover of $100 million.
The garment sector is estimated to have more than 20,000 artisans fully engaged in garment making and designs.
The ingenuity of Aba artisans, especially the garment and leather clusters (comprising of shoe, belt and bag makers) pushed the United Nations Industrial Development Organisation (UNIDO) in partnership with the Federal Government to set up a Common Facility Centre (CFC) to support the clusters to further develop their skills.
The Aba CFC, first to be set up in the country, was commissioned with the sole objective of supporting the small and medium enterprises in the city to further develop their skills.
The CFC is to also serve as a centre of excellence for capacity- building and provision of cutting edge technology for competitiveness enhancement.
According to Ken Anyanwu , secretary , Association of Leather and Allied Industrialists of Nigeria ( ALAIN), the country can generate N640 billion annually, from locally made shoe alone.
Anyanwu, in an interview with Businessday in Aba, revealed that the Aba shoe cluster produces about 320 million shoes annually and could generate N640 billion worth of business for the manufacturers, if Nigerians buy two pairs of locally made shoes at the cost of N2,000 per pair.
To boost local patronage, he said the association is embarking on a campaign tagged, ‘Operation Two Pairs of Shoes’ aimed at encouraging Nigerians to buy two pairs of locally made shoes per annum to promote the sector.
“We didn’t go into details, but simply put, an average of two pairs of shoes at N2,000 per pair would give us N640 billion business done in the sector. And if Nigerians hearken to our call and buy two pairs of shoes per annum, I tell you, there would be food on the table of many Nigerians that feed from this sector,” he said.
He explained that the data currently used for policy and advocacy in the leather sector are mere estimates, stressing that no accurate and verifiable information on the activities of the sector are available for use.
These include finished leather goods needed by Nigeria annually, finished leather produced and exported from Nigeria annually, Nigeria’s finished leather goods production capacity, quantity of products exported from the country and the accurate number of persons engaged in production in the sector.
To address this gap, ALAIN signed a memorandum of understanding (MOU) with RFID centre, Abuja, to develop
www.businessday.ng the leather sector in the country.
Radio-frequency identification (RFID) is the use of a wireless non-contact system that uses radiofrequency electromagnetic fields to transfer data from a tag attached to an object, for the purposes of automatic identification and tracking.
The Aba leather cluster, said to be the biggest in West Africa, has about 40,000 people directly engaged in the manufacture of shoes, belts and bags and a production capacity of about one million pairs of shoes per week, producing for local and international markets.
However, due to unofficial export that goes on in the sector, it has been difficult for policy makers to get accurate data to develop the sector and this is one of the issues the RFID enabled technology would help solve.
Also stifling the sector’s growth is the lack of unity among the clusters, which has created room for a number of associations under the same umbrella with different interests, views and goals.
This lack of trust and understanding among sector operators have created divisions rather than unity needed for the successful administration of the clusters in order to contribute to the overall growth of the economy.
For instance, the leather cluster has more than four associations, with each group claiming superiority over others, while the garment cluster is currently engrossed in a leadership tussle.
According to Humphrey https://www.facebook.com/businessdayng @Businessdayng
Nweze, former chairman, Abia chapter of the Nigerian Association of Small Scale Industrialists ( NASSI), disunity is the major weakness in Aba as everybody wants to answer ‘chairman’ of an association.
He observed that the Aba small- scale industrialists have enormous potential, but pointed out that disunity among the clusters are not encouraging investors to venture into the area.
“If you tell them to join NASSI, the Manufacturers Association of Nigeria (MAN) or even the city chamber (ACCIMA), they will say no because they want to answer ‘chairman’. And any investor that hears that there is no unity among the group would look elsewhere,” Nweze said.
He urged small and @Businessdayng medium industrialists (SMIS) in the area to close ranks to develop the sector and contribute meaningfully to the economic development of the state and country at large.
“We know that our main constraint of finance, but until we become organised and show that we are credible, no bank or serious investor would want to invest in us,” he warned.
“If you set up one obscure association that cannot cross Aba and you are asking for a facility in Abuja, it cannot work. You have to align with a national body to access some of these facilities,” he affirmed.
Experts have said that cohesion among functional cluster groups facilitate economic integration and better implementation of mutual agreements.
They also observed that unity affords the groups greater roles in the socio–economic development of the country, which cannot be achieved unless these clusters jettison personal interests and issues that tend to divide them.
Belonging to a group encourages self-regulation, credibility, getting required expertise in the specific industry, speaking with a unified voice to government and forming collective policy positions on issues, they further said.