No Better Time to Expand

729

Starwood Hotels & Resorts is one of the biggest hotel companies in the world, with the following international brands operating under the Starwood banner: Sheraton, Westin, St. Regis, The Luxury Collection, W, Le Méridien, Four Points by Sheraton, Aloft, and Element. Starwood is now planning to strengthen its position in Africa by adding 10 new hotels to its existing portfolio of 38, over the next three years. CEO Frits van Paasschen was in South Africa recently, and sat down with Business Traveller Africa editor Dylan Rogers.

Q: So, 10 new hotels across Africa over the next three years. Is that number cast in stone?

A: No. We’re in active discussions for many beyond. I would say at least 10, but our bigger goals are 50 by 2015 and 100 by 2020.

Q: With that in mind, where do your African plans sit in relation to what Starwood is doing across the rest of the world?

A: We have about 350 hotels around the world that are either under construction or in the process of being built, and of those, 70 to 80% are in what historically have been called ‘emerging markets’. It’s interesting to draw the comparison with China, where 10 years ago we didn’t have as many hotels as we have today in Africa. I would say that in the last 20 years, Africa has benefited less from the global growth in middle class and overall economic activity, but we see that changing in this next 10 years. In our view, this will be the decade where Africa will catch up and participate much more in that economic growth.

Q: Is there going to be a brand or brands that you push more than others, with regards your African growth?

A: All nine brands are global brands and all of them should appeal to an African traveller as much as anyone else. But, we do have 17 Sheratons and 14 Le Meridiens in Africa, and those are the brands that people in Africa are more familiar with. They are also brands that work, and both have been our pioneer brands in other markets. So, it wouldn’t surprise me if we lead with those brands, although we do have St. Regis coming to Africa in Cairo and in Mauritius. We also have Luxury Collection coming into Nigeria, for example, and we have Westin in Cape Town.

Q: Your only other South African property, currently, is the Sheraton in Pretoria. Why do you have a presence there and not in Johannesburg?

A: There’s an underlying aspect to our business, and that is that 95% of our hotels are owned by somebody else. We are in the business of operating hotels and bringing guests to hotels and making them profitable on behalf of typically local real estate owners and developers. Johannesburg is a very important market for us, and if we had just one Sheraton hotel in the whole of South Africa, you would probably put it there. On the other hand, we have to go where the opportunity is, and the business that we’re in is finding the right partners.

Q: You were recently in Nigeria, Angola and Gabon. Besides those, where, for you, are the African hot spots?

A: From a business travel point of view, Nairobi is quite prominent and somewhere where we don’t have any of our brands. We have done feasibility work there and in many other countries in and around Southern Africa. We currently operate in 15 countries, and there are many more where we could add a flag. Coming back to South Africa, with only two hotels in a market of this size, and with the international travel that comes in, certainly we’re under-represented.

Q: What about Ghana and Gabon?

A: Accra, yes, particularly looking at the economic boom that’s going on there. It’s another example of a market where we’re not in today, but where there’s certainly growth and opportunity. With Gabon, the energy output there has given the economy a boost. We’ve had two hotels there for some time and we’re looking at a few more opportunities.

Q: You have a very big presence in North Africa. Do you see this changing, as you look at more opportunities in sub-Saharan Africa?

A: Even in Egypt, where we have our biggest presence in Africa, we have quite a number of projects underway, and we’ll see growth. Libya will clearly come back after the change – that’s our hope, whilst Algeria is a strong market because of energy exports. Morocco also is one of the strongest countries in terms of their public-private partnership around promoting tourism. So, North Africa will continue to do well, but the bulk of growth as you look to the future will be in sub-Saharan Africa.

SHARE
Previous articleOn the Rails
Next articleImmediate Reward