Q&A: An Eye on Africa

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The Hilton growth plans include substantial focus on developing markets like India and China, where the demands of a large population base and growing middle class are disproportionate with the current market. This same formula can be applied to the likes of Africa, Asia-Pacific and Latin America – all on the drawing board for the company’s overseas growth.

“Whenever there is a significant demand in a market, similar to that in India and China, it becomes a great opportunity for us to jump in and build our brand for decades to come,” says Horton.

Hilton has traditionally focused on its home market, the United States, but Hilton Worldwide, the hospitality company with 10 brands, including Hilton Hotels & Resorts, is shifting its focus “The time has never been better to seize opportunities,” says Horton. “There is tremendous loyalty and trust associated with the Hilton brand. Until recently, we were not really taking advantage of the international growth potential we had, that was commensurate with the power of the Hilton brand.”

This practice is alive and well in Africa with recently-opened properties in Cape Town and the Seychelles – the former taking up residence in the Cape Town CBD, with 137 rooms. Later this year, new openings will include properties in Cairo, Egypt; Malabo, Equatorial Guinea; Windhoek, Namibia; Marsa Alam, Egypt and La Marsa, Tunisia. Further to that, more than 30 Hilton hotels are scheduled to open in 2011 across the globe.

 “Our goal is to maintain the same level of consistent service, product, and customer satisfaction across all pockets of the world so that we can build loyalty and trust among consumers,” says Horton. “Once we win in one market with a consumer, we earn his/her trust to stay with us again in another market.” For Hilton, Africa is ripe for the picking and further to the new properties already mentioned, the brand hopes to be in N’Djamena, Chad; Kampala, Uganda and Hurghada, Egypt, in the next two years.

According to Horton, when Hilton enters a new market, it prefers to work with a local management company rather than operate independently. “Local partners already have strong ties to the market with superior relationships with the operating community and a better gauge of what the local market wants,” says Horton. “Finding these partners with the proper amount of reliable experience and access to a team of employees that has the appropriate hospitality skills to manage an internationally recognised brand can be a challenge, especially in a developing market.”

Another major component Hilton looks for when entering a new market is the access to debt capital that a new property would need to succeed as it sets up. The acquisition of land can sometimes be a challenge as well. While hotel companies often find the fastest path of growth in a market to be converting other hotel properties to their own brand, markets like India and Africa can be more difficult because the ‘existing hotel stock just isn’t there’. As a result, there are far more steps involved in ramping up growth in these markets.

“We are committed to being number one and to capture this opportunity for growth in markets across the globe,” notes Horton. “We are in 76 countries now and plan to be in 82 by the end of the year.”

Those six new countries include Namibia and Equatorial Guinea. The 154-room Hilton Windhoek is scheduled to open mid-June and be the first international brand for the country. Hilton Malabo will feature 189 rooms and is scheduled to open this summer.

“This is the type of market development we want to replicate,” says Horton. “We are doing it in India; we are doing it in China – and we want to do it in Africa, too.”