All Eyes on Africa' Guy Wilkinson presentation Hotel Show 28 09 13

www.viability.ae…when diligence is due

Vision Conference 2013 Keynote Presentation: All Eyes on Africa

The Hotel Show, 30th September, Dubai World Trade Centre


Viability Management Consultants

• Hospitality and real estate development consultancy• Established in 2006• Principals have consulted in every country in the Middle East except

Iraq, as well as many in Africa• 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“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, 2013 (%)

www.viability.ae…when diligence is dueSept/Oct 2013


UNWTO World Tourist Arrivals & Revenues, 2012

• >1 billion tourists worldwide in 2012

• Asia & Pacific arrivals up 7% followed by Africa (+6%) & the Americas (+5%)


“10 years is a Long Time in Africa”

Other indicators: • 2008 - $860 billion spent on goods

& services (India $635 Billion) • 2020 - $1.4 trillion on goods &

services • 10% of oil reserves• 40% of gold• 95% of platinum • 60% of world’s available,

unexploited crop land • Agricultural output set to triple in 20

years • 2015 – 100 million households will

have discretionary income • 316 million cell phone users• 700 million active SIM cards• 22 nations with 400 m population of

‘middle income’ status; 10/ /200 m more by 2025

PRE 2000 • 16 wars • 8 democratic elections • 2% GDP growth • 300 publicly listed companies • 10 companies with revenue

>$1 billion • $15 billion capital inflows

NOW • Somalia/Sudan at war • 36 democratic elections • 5.5% GDP growth • 1,400 publicly-listed companies • 100 companies with revenue

>$1 billion • $87 billion capital inflows


World Bank Africa’s Pulse April 2013 Highlights

• In 2012, a quarter of African national GDPs grew at 7% or higher• Sierra Leone, Niger, Cote d’Ivoire, Liberia, Ethiopia, Burkina Faso & Rwanda are

among the fastest growing economies in the world • Net private capital flows to Africa grew 3.3% to a record $54.5 billion• FDI inflows to Africa increased by 5.5% in 2012 to $37.7 billion • Medium-term growth prospects remain strong thanks to:

– a gradually improving world economy– sustained consumer spending, accounting for >60% of Africa’s GDP– consistently high commodity prices, coupled with discoveries of oil, gas,

copper & other minerals and the expansion of mining (by 2020, only 4 or 5 African countries will not be involved in mineral exploitation)

– more investment in regional infrastructure, trade & business growth– better political and economic governance– declining inflation, which fell from 9.5% in 01/12 to 7.6% in 12/12– improved access to credit with lower interest rates– a rebound in agricultural incomes, thanks to better weather (Sahel, Horn of

Africa), but…

“Resource-rich African countries will consciously need to invest these new earnings in better health, education and jobs, and less poverty for their people in order to maximize their national development prospects.”


Hotel Supply & Brand Penetration in Africa

No Branded Supply

1. Angola2. Burundi3. Central African Republic4. Comoros5. Democratic Republic of Congo6. Eritrea7. Liberia8. Mauritania9. Niger10.Republic of Congo11.Sierra Leone12.Somalia13.South Sudan

One African Branded Hotel

1. Burkina Faso2. Guinea Bissau3. Lesotho4. Malawi5. Rwanda6. Swaziland

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

• 90,000 from 29 chains as per W Hospitality– 48,000 in North

Africa’s 6 countries

– 41,000 in SSA’s 48 countries

N A

fric

aSub

Sah

ara

n A

fric

a


Actual Performance Key Cities: OCC & ADR – US$ - YTD 2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

$ 0

$ 50

$ 100

$ 150

$ 200

$ 250

$ 300

Occupancy ADR (US$) Note: STR tracks 650 African hotels - 120,000 rooms


Lagos second globally in terms of ADR… YTD 2013 - ADR – US$

Beijing

Mad

rid

Berli

n

Cape

Town

Toro

nto

Los An

gele

s

Buen

os A

ires

Nairo

bi

Toky

o

Sydn

ey

Rome

Accr

a

Lond

on

Hong

Kong

New Y

ork

Dubai

Lago

sPa

ris0

50

100

150

200

250

300

350

121

153

199

277

343


Africa Room Supply/Demand % Change12-Month Moving Average – YE 2005 to July 2013

2005 2006 2007 2008 2009 2010 2011 2012-20

-15

-10

-5

0

5

10

15

Supply % Chg

World Cup Effect

Arab Spring

Arab Spring Rebound

Global Finan-cial Crisis


Key Countries Performance: YTD 2013, YoY % change, OCC & ADR (local currency)

Alge

ria

Bots

wan

a

Egyp

t

Keny

a

Mau

ritiu

s

Mor

occo

Namib

ia

Niger

ia

Sout

h Af

rica

Tanz

ania

Tuni

sia

Zam

bia

Zim

babw

e -20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Occupancy ADR


Africa Hotel Pipeline – Total Pipeline 2011-2013

Note: Sample survey from March 2013 of 29 chains/59 brands

2011 2012 20130

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

0

20

40

60

80

100

120

140

17,038 17,21718,782

13,700

17,109

21,052

7577 7776

100

130

SSA Rooms N Africa Rooms N Africa Hotels SSA Hotels

Ro

om

s

Ho

tels


Africa Hotel Pipeline – Top 10 Countries by Rooms

Egypt Nigeria Morocco Algeria Kenya Ghana Tunisia Libya South Africa

Gabon0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000 7,6447,470

5,178

3,160

1,469 1,441 1,441 1,359 1,3201,128


Africa Hotel Pipeline – Top 10 Cities by Rooms, 2013 vs 2012

Rank City 2013 Total 2012 Total % Change in 2013

Hotels Rooms Hotels Rooms Hotels Rooms

1 Lagos 25 4,080 17 3,415 47% 19%

2 Cairo 8 2,843 12 2,883 -33% -1%

3 Hurghada 5 2,221 2 1,084 150% 105%

4 Abuja 11 1,598 10 1,204 10% 33%

5 Algiers 7 1,528 7 1,486 0% 3%

6 Tangier 7 1,505 5 1,080 40% 39%

7 Nairobi 9 1,437 4 678 125% 112%

8 Casablanca 9 1,344 8 1,063 13% 26%

9 Accra 7 1,291 7 1,262 0% 2%

10 Sharm El Sheikh 2 1,213 2 1,215 0% 0%


Africa Hotel Pipeline – Other Cities by Rooms, 2013 vs 2012

Rank City 2013 Total 2012 Total % Change in 2013

Hotels Rooms Hotels Rooms Hotels Rooms

11 Marrakech 6 1,131 10 1,886 -40% -40%

12 Libreville 7 1,128 6 1,024 17% 10%

13 Tripoli 3 1,036 3 1,084 0% -4%

14 Addis Ababa 6 1,019 2 273 200% 273%

15 Marsa Alam 2 838 1 265 100% 216%

16 Luanda 3 764 3 824 0% -7%

17 Rabat 4 732 3 540 33% 36%

18 Conakry 3 659 3 659 0% 0%

19 Dakar 4 659 3 447 33% 47%

20 Cotonou 4 645 3 442 33% 46%

Subtotal 132 27,671 111 22,814 19% 21%

Others 75 12,163 66 11,512 14% 6%

Total 207 39,834 177 34,326 17% 16%


Africa Hotel Pipeline – North-South Split of Top 20 Cities

SSA38%

NA62%

SSA33%

NA67%


Africa Hotel Pipeline – Top 10 Chains by Rooms

Hilton

Wor

ldwid

e

Carlso

n Rez

idor

Accor

Mar

riott

Star

woo

dIH

G

Louv

re

Kem

pins

ki

Möv

enpi

ck

Rotan

a0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

6,2305,947

5,165

3,900

2,514 2,413 2,290

1,481 1,369 1,355


Africa Hotel Pipeline – Top 10 Brands by Rooms

0

1,000

2,000

3,000

4,000

5,000

6,000

5,400

4,191

2,192

1,767 1,676 1,675 1,608 1,481 1,369 1,296


Mini Case Studies of 4 Hotel ‘Hot Markets’

Economic Highlights of Case Study Countries (2012)

# City Country Population (m) GDP ($ bn) GDP/capita

($)GDP Growth (%)

1 Nairobi Kenya 43.2 37.3 865 4.4

2 Lagos Nigeria 168.8 262.5 1,555 6.5

3 Luanda Angola 20.8 114.2 5,485 6.8

4 Accra Ghana 25.4 40.7 1,605 7.9

Source: World Bank

1

24

3


Hot Market Case Study 1: Nairobi, Kenya

• Population >3 million, business hub for East African Community• Considered main alternative location to South Africa for corporations entering Africa• Expanding business infrastructure, highly qualified workforce• Tourism hub for safaris in Masai Mara, Mount Kilimanjaro• Generally ageing hotel stock, but…• Tribe & Sankara are cool boutique hotels – Kempinski & Crowne Plaza just opened• >1,000 pipeline rooms

Future Hotel Rooms YearCountry Lodge (City Lodge) 84 2013Dusit D2 Nairobi 197 2013easyHotel Westlands 90 2013Radisson Blu Nairobi 244 2014Park Inn by Radisson Nairobi Westlands 126 2014Novotel Nairobi 200 2016Ibis Nairobi 200 2016


Hot Market Case Study 2: Luanda, Angola

• Population 5 million, ranked most expensive city on earth (Tokyo No 2)!• Capital of Africa’s No 2. oil producing nation (85% of GDP) – and

China’s top oil supplier - also a gas and diamond producing hub• 27-year civil war ended in 2002, resulting in major reconstruction• High barriers to entry• Hotel undersupply, all hotels owner-operated currently• ADRs of US$250+, small pipeline

Future Hotel Rooms YearRadisson Blu Luanda 257 2015Kempinski Hotel Talatona 250 2015Pestana Luanda Bay 257 2016


Hot Market Case Study 3: Lagos, Nigeria

• With Africa’s largest population (city population, 8 m – Lagos State, 17.5 m)…• Nigeria will soon overtake South Africa as the continent’s largest economy -

and one of world’s Top 20 economies• Oil (80% of export earnings) and business hub for West Africa• Difficult place to develop hotels - new Intercon took 8 years to open!• Already well served by hotel brands - pipeline of 23 hotels, >3,500 rooms

Future Hotel Rooms YearBest Western Premier Starfire 38 2013Africa Sun Amber Lilygate 74 2013Mantis The George 64 2013Tulip Inn Lagos 100 2014Ramada Lekki Lagos 164 2014easyHotels Adenyi Jones Avenue 50 2014easyHotel (Bristol) 80 2014easyHotel Breadfruit Street 109 2014Crowne Plaza Lagos Airport 275 2014Park Inn by Radisson Apapa 125 2015Lagos Airport 250 2015Marriott Lagos 150 2015Holiday Inn Lagos Victoria Island Waterfront 300 2015Holiday Inn Lagos Airport 300 2015Golden Tulip Crusader Suites Ikoyi 42 2015Best Western Premier Georgetown 65 2015Ibis Apapa 130 2015Park Inn by Radisson Ikeja 135 2015Mantis Ikeja Hotel 65 2015Lagos Ikeja Hilton Garden Inn 120 2016Luxury Collection Ikoyi 441 2016Novotel Ikeja 250 2016Fairmont Lagos 230 2017


Hot Market Case Study 4: Accra, Ghana

• 4 million population, capital of mineral-rich Ghana (gold, bauxite, phosphates)• Relatively advanced import-substitution industries include electronics

manufacturing, car manufacturing• Oil production began in 2010, inspiring an FDI surge• Ghana has attractive beaches too, plus castles, forts, nature reserves• Smattering of global hotel brands• Pipeline of 1,300 rooms

Future Hotel Rooms YearKempinski Hotel Gold Coast City 269 2013African Sun Amber Accra Airport 201 2013Tulip Residences Accra 101 2014Marriott Accra 200 2014Ibis City Centre 120 2015Lansmore Accra (Lonrho) 200 2015Radisson Blu Accra Airport 200 2016


Thanks for listening

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All Eyes on Africa' Guy Wilkinson presentation Hotel Show 28 09 13