Accor SA will open 60 new hotels in 14 countries in Africa in the next four years, its Chief Executive Officer for Middle East and Africa Mark Willis said.
During the next two years, the European hotel operator will open more than half of them in Egypt, which Willis said is rebounding after “external factors” hurt the industry.
In 2015 an Islamic State affiliate blew up a Russian aircraft as it left the Egyptian resort of Sharm el-Sheikh in an attack that killed 224 people.
“Egypt is resurrecting after 10 years of a tough situation,” Willis said in an interview in the Kenyan capital, Nairobi. Egypt has overtaken Kenya’s coastal region as the preferred destination for European tourists and investors, he said, and revenue per available Accor room there has risen 20 percent year-on-year.
Kenya’s coastal city of Mombasa “is not at the forefront of people’s minds today,” he said. Only one of the target hotels will be in the East African nation known for safaris and beach tourism.
The continent has sustained unprecedented rates of economic growth, driven chiefly by sturdy domestic demand, better macroeconomic management and improving political stability.
$1 Billion Fund
Key markets in Accor’s growth plan include Nigeria, Ethiopia and South Africa, where it will open 10, seven and three hotels respectively by 2020. Accor has 143 hotels in Africa, 63 of them south of the Sahara, and will promote its Movenpick luxury brand, Willis said.
The hotel group will finance the growth with more than $1 billion from the Kasada Fund set up by Katara Hospitality and Accor last year for sub-Saharan Africa.
Accor invested $150 million, while the Qatar Investment Authority unit put in $350 million. The remaining $500 million will be raised through bank loans, according to Willis.
It may expand through mergers, acquisitions and partnerships on the continent, including in South Africa, where Accor is already considering several opportunities, Willis said.
“We have a soft footprint in South Africa, which historically was not a focus for Accor, but it very much is today,” he said.
While Accor has considered introducing its home-sharing platform Onefinestay in Kenya, the continent is still immature for that type of product due to reasons such as security, Willis said.
“It will continue to develop, and where there’s an opportunity for Onefinestay, for sure we will put it on the table,” he said.