By Dana Sanchez
Angola pushed Egypt out of second place in 2016 among the top 10 African countries for number of hotel rooms under construction.
While Angola has yet to develop a tourism sector that attracts many international tourists, the country’s internal tourism sector is thriving. Angola is already equipped with what it takes – stunning beaches, wildlife safaris, the Trans-Kalahari Reserve (the world’s largest game reserve), vast natural rain forests and an extraordinary breadth of wildlife.
With 40 percent of its 25 million people of working age, Angola has a huge workforce. Recognizing this, the country’s sovereign wealth fund, FSDEA, has invested in the College of Hospitality Management in Benguela. Its mission is to deliver quality hospitality education to young aspiring Angolans.
From Ventures Africa. Story by Adrian Leuenberger, group head asset management at Quantum Global, an Africa-focused private equity firm.
National infrastructure is a central ingredient in the pursuit of long-term sustainable economic growth. Global business hubs such as Dubai and Singapore placed infrastructure at the heart of their approach to nation building, turning them into world-class cities and a haven for investors.
Whist roads and logistics are crucial, high-quality accommodation and hospitality facilities are critical. Investors, policy makers and business travelers will always need somewhere to sleep – so hospitality is as much a practical necessity as it is a fast-growing industry sector and investment opportunity.
The scale of growth in Africa’s hospitality market is most noticeable in sub-Saharan Africa. In April 2016, figures from W. Hospitality Group’s Hotel Chain Development Pipeline Survey showed that 365 new hotels were under construction – adding 64,000 new rooms. In the same month, Traveller 24 magazine stated that the hospitality sector grew by 42.1 percent in Sub-Saharan Africa in 2015 – compared to just 7.5 percent in North Africa.
This growth represents rich pickings for global hotel chains. Ibis Styles has 28 planned hotels, Radisson Blu plans 25, Mercure 24 and Hilton 16 — major opportunities for companies in the supply chain. With this growth comes the double-edged sword of human capital development: thousands of new jobs coupled with an under-skilled workforce.
The College of Hospitality Management in Benguela has a mission is to deliver quality hospitality education to Angolans. Since opening in 2016, 37 Angolan students have enrolled with varying degrees of experience, each selected by College of Hospitality Management’s global hospitality education partner, Ecole Hoteliere de Lausanne in Switzerland.
Developing a skilled local workforce means that employee earnings remain in the country and contribute to multiplier industries and GDP growth. It also means that employees can build better futures for themselves and their children and spend money on non-oil goods and services. In the current climate, this goal is front and center.Loading...
There is an intriguing authenticity for foreigners when they interact with local workers. Across most of the Gulf (with the exception of Bahrain), visiting executives almost always interface with expat workers in the hospitality sector. It gets the job done but can create a distance between locals and foreign businessmen. In Bahrain, taxi drivers and hospitality employees are almost always nationals – a source of pride for the nation and infinitely more interesting for visitors.
In Africa, countries that use their own workforce and showcase their cultural uniqueness (as opposed to imposing a bland and standardized “global” hospitality experience), stand to gain a competitive advantage. Almost every aspect of the hotel experience is a potential opportunity – food and beverages that reflect local tastes and traditions, art and music in communal areas, local entertainment and cultural excursions turn a business trip into something memorable.
As growth continues, we are seeing more opportunities emerge for private equity and institutional investors. At the Africa Hotel Investment Forum in June 2016, there was consensus that optimism in hospitality across sub-Saharan Africa remains high. In March 2016, the Mauritius-based private equity fund, QG Africa Hotel LP (managed by QG Investments Africa), acquired a 100-percent interest in the InterContinental Hotel in Lusaka from Kingdom Hotel Investments. The 244-room landmark hotel is in a prime location in Zambia’s capital. The acquisition is a prime example of how private equity investors can take advantage of Africa’s burgeoning hospitality sector.
Angola has a national master plan for its tourism industry, which includes the greenfield development of a 250-room luxury five-star hotel in the city center of Luanda. A three-star hotel is also being built next to the future Port of Caio in the province of Cabinda, which is an important strategic location for what is set to become one of the biggest ports on the continent.
The hospitality sector and its role in the value chain is not merely a necessary accompaniment to economic growth or an afterthought to infrastructure development. It is absolutely critical to both – and a category that offers potentially life-changing opportunities for thousands of Africans. Without education, however, none of that can be realized. Graduates of the College of Hospitality Management will receive an internationally recognized qualification with European accreditation. The quality of education means that over the medium term, graduates will lead and develop teams of professionals who are all trained to global standards, significantly building capacity in the national hospitality workforce.
These future leaders now also have an opportunity at the College of Hospitality Management to build upon their core skills in fields such as game reserve or safari lodge management. This is how African professionals can add value to the hospitality and tourism experience and carve out a niche that reflects national character, tradition, and culture. This is how Africa’s hospitality sector should mature and where it has the capacity to add great value to wider socioeconomic growth — especially for private equity investors taking advantage of this exciting and important industry sector.