Boom time for Africa's hospitality industry
Written by Danny Bryer is Director of Sales, Marketing and Revenue for the Protea Hospitality Group, which is the largest hotel company on the African continent.
The hospitality industry in Africa stands at the precipice of a development tsunami that in the next five years will, at a conservative estimate, create in the region of 200,000 new hotel rooms to serve a domestic, trans-continental and international market that has an ever-growing appetite for the region.
For a quick snapshot, consider the October 2013 data released by STR Global, the company that provides hotel statistical information covering performance data, forecasts, annual profitability, pipeline and census information from around the world. According to their Middle East/Africa hotel development pipeline data, there are 493 hotels being built or in the final planning phase, that in the medium term will create nearly 120,000 additional rooms.
This excludes the hundreds of hotels that are in the early planning stages in sub-Saharan Africa, a region that is seen as an increasingly attractive development prospect as global uncertainty prevails about the Arab Spring.
But why are the largest international hospitality brands so keen to expand into Africa, including Marriott International that’s in the process of adding the Protea Hospitality Group to massively bulk up its presence on the continent.
According to the United Nations World Tourism Organisation, Africa saw approximately 52 million international tourist arrivals last year, a six per cent increase from the previous year. In 2012 Africa’s revenue from tourism increased by 2.8 per cent to US$34 billion, which is a desirable pie in anyone’s book.
But as with everything financial, the hospitality industry can’t be viewed in isolation in the African context, because everything rides on the fact that Africa’s recent economic growth and prosperity will continue.
According to the UN Commission for Africa, over the past decade greater stability, sound macroeconomic policies, improved terms of trade and blossoming partnerships with emerging economies have widened the economic policy space of African policy makers.
In other words, African nations have more freedom than ever before to determine their own development paths.
The Commission has said that Africa’s economic growth is in fact still accelerating, with a projected growth of 5.3 percent in 2014 based on “the expansion of agricultural production, robust growth in services and a rise in oil production and mining”. Exports are also expected to grow, says the Commission, along with a resurgence in domestic demand driven by consumption and investment.
This is, in turn, creating a new middle class of millions of people in countries across the continent; consumers with disposable income who will travel for business and pleasure.
Currently the Protea Hospitality Group is the largest hotel group in Africa with approximately 120 Protea Hotels and African Pride Hotels in eight sub-Saharan countries.
As a company created and developed on this continent, we’ve had a head start in terms of growing quality hospitality, and all of these economic factors collectively tell us we have chosen the smart expansion option, which is to focus exclusively on business development and job creation in Africa, where we currently directly employ more than 15,000 people.
Among the markets that we see as key critical to rapid hospitality investment in the medium term are Nigeria, Ghana, Uganda, Zambia, Kenya, Angola, Tanzania and Malawi, which we predict will see a surge in business travel in the next five years in line with their projected economic progression.
Africa is at a crucial development crossroads, though, and how countries and regions choose their economic partners will massively influence the nature and sustainability of true economic growth.
Perhaps most fundamental is that the continent should no longer stand cap in hand when negotiating trade and/or “aid” with so-called developed nations, which have in recent years been airing more economic dirty laundry than anyone ever believed was possible.
Numerous “developed” countries have been ruined financially or come very close to it, leaving in their wake devastation on a scale that has shaken the very foundations of the world economy.
So perhaps Africa should be seeking like-minded partners to lay a solid foundation for development in the next decade.
And for inspiration here I return to the UN Economic Commission for Africa, which in a report released this year entitled “Africa-BRICS (the Brazil, Russia, India, China and South African economic alliance of emerging economies) Co-operation: Implications for growth, employment and structural transformation in Africa”, suggests relations with other emerging markets are more widely predicated on mutual benefit and solidarity rather than gift giving or pure commerce.
In other words, when emerging markets play together nobody gets to be the playground bully, so everyone has a good time.
It is absolutely true that current predictions suggest the hospitality industry is set to grow at a rate entirely unprecedented in African history, with billions to be invested in infrastructure and human capital development.
But it is also true that this can only happen if African economies make smart choices now that include sustained development, job creation and identifying those best friends who won’t turn into bullies down the line.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.