Viability PPT Hospitality Round Table Tanzania 10 11 14

www.viability.ae …when diligence is due

State of the African Hospitality Industry Keynote Address by Guy Wilkinson, Managing Partner, Viability Management Consultants Hospitality Round Table, Dar es Salaam, 10th November 2014


Viability Management Consultants

•  Hospitality and real estate development consultancy •  Based in Dubai, established in 2006 •  Principals have consulted throughout the Middle East, as well as many

countries in Africa: Tanzania (inc Zanzibar), Ethiopia, Rwanda, Uganda; Egypt, Morocco, Tunisia, Sudan, Chad; Nigeria

•  Specialized in providing: –  Bankable market & financial feasibility studies –  Market studies in a variety of hospitality-related sectors –  Operator selection and contract negotiations –  Operational reviews and interim management solutions

•  Reputation for detailed work; high-quality, well-reasoned, realistic advice •  Special thanks to: Philip Wooller of STR, Trevor Ward of W Hospitality

“Truly an expert consulting company.” “…a most valuable contribution to our knowledge base.” “All responses from Viability were exceptionally prompt and pertinent.”


IMF World GDP Growth Forecast Map, 2014 (%)

www.viability.ae …when diligence is due Sept/Oct 2013


African Middle Class is Growing

Source: Deloitte, 2012

At least 75% of population is middle class (defined as those spending between US$2 and $20 per day) 21-50% Up to 20%


UNWTO World Tourist Arrivals & Revenues, 2014

•  Almost 1.1 billion tourists worldwide in 2013, up 5%

•  Asia & Pacific arrivals up 6% followed by Europe & Africa (both 5%)

•  1 in 11 jobs worldwide!


No Branded Supply 1.  Angola 2.  Burundi 3.  Central African Republic 4.  Comoros 5.  Democratic Republic of Congo 6.  Eritrea 7.  Liberia 8.  Mauritania 9.  Niger 10.  Republic of Congo 11.  Sierra Leone 12.  Somalia 13.  South Sudan One African Brand 1.  Burkina Faso (1 hotel) 2.  Guinea Bissau (1 hotel) 3.  Lesotho (2 hotels) 4.  Malawi (1 hotel) 5.  Rwanda (2 hotels) 6.  Swaziland (3 hotels)

Hotel Supply & Brand Penetration in Africa, 2014

•  Total supply: 460,000 rooms in 54 countries (2013), including…

•  84,000 from 27 chains as per W Hospitality (2014)

N A

fric

a Su

b Sa

hara

n A

fric

a


Maximum 2 International Branded Hotels 1.  Bamako 2.  Djibouti 3.  Khartoum 4.  N’Djamena 5.  Port Gentil 6.  Yaoundé YTD July 2014 Performance Occupancy – 65.6% ADR - $190.90

Cities With Limited Branded Supply in Africa

1 2

3 4

6

5


$0

$50

$100

$150

$200

$250

$300

$350

$400

0%

10%

20%

30%

40%

50%

60%

70%

80%

Occupancy ADR (USD)

Actual Performance Key Cities: OCC & ADR – US$ - YTD 07 14

Note: STR currently tracks 860 African hotels - 172,500 rooms


30

80

130

180

230

280

330

380

Abuja Boasts The World’s Highest ADR! (YTD 07 14 – US$)


-20

-15

-10

-5

0

5

10

15

Supply % Chg Demand % Chg

World Cup

Arab Spring

Arab Spring Rebound

Global Financial

Crisis

Africa Room Supply/Demand % Change 12-Month Moving Average – YE 2005 to July 2014


Africa Hotel Pipeline – Total Pipeline 2010-2014

Note: Sample survey from April 2014 of 27 chains/60 brands

16,909 17,038 17,217 18,065 16,449

14,801 13,700 17,109

18,191 23,282

72 75 77

73 73 77 76

100

115

142

0

20

40

60

80

100

120

140

160

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2010 2011 2012 2013 2014

Hot

els

Roo

ms

SSA Rooms N Africa Rooms N Africa Hotels SSA Hotels


Sub-Regional Breakdown of 2014 Pipeline (% of Rooms)

Northern 41%

Southern 6%

Central 8%

Eastern 11%

Western 34%


Africa Hotel Pipeline – Top 10 Countries by Rooms

Africa Hotel Pipeline 2014 – Top 10 Countries by Rooms 6,614

4,828 4,703

3,172

2,205

1,541 1,293

1,080 990 914

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Nigeria Morocco Egypt Algeria Libya Tunisia South Africa

Ghana Ethiopia Senegal


Top 10 Countries: % of Pipeline Rooms Under Construction

37

58

83 84 86

72

59

68

47

55

0

10

20

30

40

50

60

70

80

90

100

Nigeria Morocco Egypt Algeria Libya Tunisia South Africa

Ghana Ethiopia Senegal


Africa Hotel Pipeline – Top 10 Chains by Rooms

6,248 6,165

5,243

3,499

2,210 2,055

1,587 1,567 1,455 1,129

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000


Africa Hotel Pipeline – Top 10 Brands by Rooms 4,723

4,336

2,116 1,912

1,567 1,437

1,264 1,180 1,154 1,129

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000


Comparison: GCC 2014 Pipeline - Top 20 Chains by Rooms - 5,000 10,000 15,000 20,000 25,000

Hilton Starwood

Marriott Accor

Rotana IHG

Millennium Wyndham

Hyatt Golden Tulip

Rezidor Fairmont Ra!es

The Address Premier Inn

Anjum Viceroy

Time Kempinski Bin Majid

Four Seasons Others

9,593 7,912 7,707

6,919 6,729

5,480 4,634

3,884 3,678

3,104 3,070

2,500 2,448

1,848 1,743

1,378 1,273 1,259 1,210 1,194

23,560

Source: Viability, June 2014 Data


East Africa Pipeline Focus City Country Chain Hotel Rooms Year

1 Addis Ababa Ethiopia Accor Pullman Addis Ababa 316 2017 2 Addis Ababa Ethiopia Best Western Great Abyssinia 161 2014 3 Addis Ababa Ethiopia Best Western Noah 110 2015 4 Addis Ababa Ethiopia Louvre Golden Tulip Addis Ababa 90 2014 5 Addis Ababa Ethiopia Marriott Courtyard by Marriott Addid Ababa 209 2019 6 Addis Ababa Ethiopia Marriott Marriott Executive Apts Addis Ababa 104 2015 7 Amboseli Kenya Minor Elewana Amboseli 16 2014 8 Arusha Tanzania Hyatt Hyatt Regency Arusha 144 2016 9 Bazaruto Mozambique Pestana Pestana Bazaruto Villas 2nd Phasa 30 2015 10 Dar Es Salaam Tanzania Best Western Colosseum 90 2014 11 Dar Es Salaam Tanzania Rotana Dar Es Salaam Rotana 200 2018 12 Dar Es Salaam Tanzania Wyndham Ramada Resort Dar Es Salaam 136 2014 13 Dar Es Salaam Tanzania Wyndham Ramada Encore Dar Es Salaam 116 2014 14 Kigali Rwanda Carlson Rezidor Radisson Blu Kigali 292 2014 15 Kigali Rwanda Carlson Rezidor Park Inn by Radisson Kigali 161 2015 16 Kigali Rwanda Kempinski Kempinski Hotel des Mille Collines 112 2014 17 Kigali Rwanda Marriott Marriott Kigali 254 2015 18 Maputo Mozambique Pestana Pestana Rovuma 66 2015 19 Nairobi Kenya Carlson Rezidor Radisson Blu Nairobi 271 2014 20 Nairobi Kenya Carlson Rezidor Park Inn by Radisson Nairobi Westlands 145 2014 21 Nairobi Kenya Dusit dusitD2 Nairobi 101 2014 22 Nairobi Kenya Hilton Hilton Garden Inn Nairobi 171 2017 23 Zanzibar Tanzania Best Western Zanzibar 26 2014 24 Zanzibar Tanzania Four Seasons Four Seasons Resort Zanzibar 73 tbc 25 Zanzibar Tanzania Hilton DoubleTree by Hilton Stone Town 58 2014 26 Zanzibar Tanzania Hyatt Park Hyatt Stone Town 72 2015

3,524


African Hotel Pipeline to create 320,000 New Jobs (2013 Data)

2014, 136,000 , 43%

2015, 87,000 , 27%

2016, 70,000 , 22%

2017 onwards, 27,000 , 8%


North-South Di!erences in Job Creation

North Africa •  115,000 jobs in 5 countries •  Industry more developed •  Pipeline growth slower @

9% •  Hiring trends:

–  Large numbers of junior sta!

–  Rapid promotion of most able individuals

Sub-Saharan Africa •  165,000 jobs in 23 countries •  Industry less developed •  Pipeline growth faster @

23% •  Hiring trends:

–  Influx of foreign top management

–  War to attract/retain talented middle management

–  Substantial investment in training

•  80% of jobs to be created by the Top Ten hotel chains


WTTC Tanzania Report 2014 Highlights 1: Ranking


WTTC Tanzania Report 2014 Highlights 2: Employment


WTTC Tanzania Report 2014 Highlights 3: Investment


Thanks for Listening, Questions Please

Tel +971 3 344 3734 Fax +971 4 344 0907


Contact Viability Management Consultants

Guy Wilkinson Managing Partner Viability Management Consultants PO Box 191234 Dubai United Arab Emirates Email: [email protected] Mobile: +971 50 450 6276 Tel: +971 4 344 3734 Fax: +971 4 344 0907 Web site: www.viability.ae

Viability PPT Hospitality Round Table Tanzania 10 11 14

Real Estate

african hotels

europe africa

n africa sub saharan

variety of hospitality

total supply

african brand

african middle class

limited branded supply