CAPE TOWN, South Africa — Hoteliers are increasingly devising their own solutions — particularly with financing — to get hotels open across Africa, citing the absence of a required level of sophistication.
During a panel discussion at the Future Hospitality Summit, formerly the African Hospitality Investment Forum, Erwin Garnier, senior director of development, Africa, Radisson Hotel Group, said investors and owners in Africa still do not look at hotel development as a separate, specialized real-estate class.
“There is a lack of understanding of market opportunities and feasibility. At Radisson, we want to accelerate via conversions. Yes, that takes longer than it does in Europe, so we have to support our developers with the right talent and the right funding strategy,” he said.
Khalil Manji, partner and CEO, Compagnie Hoteliere et Immobiliere de Congo, agreed owners must view hospitality as a different branch of real estate.
“They think because they have done [residential], they can do it, but they need the right infrastructure in their companies," he said. "We have made that mistake ourselves and saw that we needed to hire the right people."
He noted they've already seen improvement in recent projects in the Democratic Republic of the Congo.
“We predict our fourth and fifth hotels will be on time and largely in budget,” he said.
Its open hotels are the 120-room Novotel Lubumbashi, 116-room Novotel Kolwezi and 115-room Novotel Kinshasa La Gombe, while the 171-room Ibis Styles Kinshasa and 138-room Ibis Goma are due to open in the third and fourth quarters of this year, respectively.
He added that in some markets, the type of financing CHIC requires is simply not there.
“We want longer tenures and grace periods, and banks are not prepared for that, so we have leaned to our own capital. This is important for hotels that have a pre-opening timeline of four years and do not bring in revenue before 4.5 years,” he said.
He said the DRC is a dollarized economy, which makes it easier to repatriate capital.
“Angola, for example, is not, so we would need capital backup to pay suppliers,” he added.
Real or perceived hurdles makes capital harder to secure and more expensive to repay, said Oussama El Kadiri, partner and head of hospitality, tourism and leisure advisory services, Middle East and North Africa, at business advisory Knight Frank.
“Volatility does mean risk,” he said.
Garnier cites Nigeria as an example where the fundamentals are present but a high degree of development risk persists.
“We have seen the cost of development double there in the last few years, and that makes development less viable," he said. "We see a lot of signings, but opening is difficult, even in a city with a huge population, due to government and currency volatility. Cost of development is hard currency, goods from abroad, while post-openings is local currency,” he said.
He said one solution is public-private partnerships.
“This allows us to access prime lending with tax incentives for the promoter. The Radisson Collection Hotel Waterfront Cape Town is an example. It has sectional title. You cut the title to allow multiple investors in the same property. In [that hotel there are] eight owners, eight sectional owners, who invest less capital each. That is a solution when raising capital is expensive,” he said.
He said one hotel he worked on in Africa had 190 keys but opened in less than 12 months, which permitted a faster reimbursement of financing.
“The structure was different, as the idea was to open as soon as possible. We had 2,000 employers on site. We had blended financials to have a mix of local and international currency, and we negotiated with suppliers and vendors to make sure most of the development was local,” he said.
He added difficulties often exist when the investor also is the developer.
CHIC’s Manji said the bureaucracy and approach of government also needs to be better addressed.
“All the ministries come in silos and tax us individually. We need to tell it that for every nine direct jobs we create, there are 26 indirect ones. This is the message for government. We have capacity, good hotel schools in East Africa and South Africa, and we have the capacity to look for consultants within the continent, not outside,” he said.
Garnier said Morocco is a market to look to.
“We are positively seeing what is happening in Morocco. The kingdom has a fund for hospitality, so it is a focus, and that plays out in the numbers. There is funding,” he said.
Before the panel began, Trevor Ward, owner of consultancy W Hospitality, gave an overview of the African hotel market.
He said even though the opening-to-signing ratio remained low in Africa, across 2025-2026 it is predicted that 304 projects will open, 100 more than in 2023-2024. In that number, across the continent in 42 countries, resides 50 hotel firms, 145 brands and 104,444 rooms.
The markets leading the way are the usual suspects — Morocco, Egypt and South Africa — and there are no proposed hotels in 12 countries, all of which are in the so-called “coup belt” ranging from Mali in the west to South Sudan in the east.
Ward said it is no surprise based on El Kadiri, Garnier and Manji’s comments that the large international brands are focused on innovative financing and conversions.
He said in the pipeline, Marriott has 28.4% of it, Hilton 16.3% and Accor 14.4%.
He added that in the most recent data of hotels that had been opened, resorts comprised 47% of the total, even though they had comprised 30% of that period’s initial signings.