CAPE TOWN, South Africa — Africa believes in the hotel business model of franchising, and Valor Hospitality Partners believes it's at the forefront of the trend across the continent.
The franchising model is beginning to mature throughout Africa's hospitality industry, even though international brands have historically been “very fussy,” said Tony Romer-Lee, Valor Hospitality's managing partner for Asia, the Middle East and Africa.
It's logical that Africa is the next big growth market for hotel franchising because the continent’s economy is growing and the global hotel brands don't have a strong presence across Africa yet, he said. Valor assumes the role of a specialist travel agency, which guides the journey of hotel developers and owners across Africa, he added.
“We have the accessibility and ability to connect with Africa. The [brands’] confidence here is not high,” Romer-Lee said in an interview at the Future Hospitality Summit Africa conference.
Euan McGlashan, Valor Hospitality's global co-founder and CEO, said Valor began in the U.S. in 2010, expanded to the United Kingdom in 2012 and then debuted in Africa in 2013. The Africa team, which included McGlashan, Romer-Lee and Michael Pownall — Valor's managing partner of Africa, the Middle East and Indian Ocean — saw a gap in Africa's hotel franchising scene as well as opportunity for growth.
“When we started talking about franchises, we were met with blank eyes. No one considered it an option,” McGlashan said.
Valor has approximately 100 hotels in its global management portfolio, 85% of which are franchises with brand affiliations, while the rest are independent hotels.
Valor Hospitality recently added to its hotel management portfolio with a flurry of deals in African markets. On June 19, Valor announced a management agreement of the 150-room Holiday Inn SD City Dakar in the Senegalese capital with owner Senegindia SA.
That same week, it announced the signing of three new-build hotels in Namibia: the Vignette Collection Dunes Resort Swakopmund, Holiday Inn Walvis Bay and 147-room Voco Windhoek Central Business District. The owner of all three hotels — all expected to open in early 2028 — is Windhoek-based Santiago Property Developers and Sydney-based Cadence Capital.
Lastly, on June 23 Valor signed the 119-room Crowne Plaza Lagos Ikeja — also an IHG brand — with owner Watercress Hotel International. The hotel is also scheduled to open in 2028.
Valor Hospitality's hotel portfolio and pipeline has properties in five other African nations: Democratic Republic of Congo, Kenya, Mauritius, South Africa and Tanzania.
The hotel in the DRC is the 178-room Hilton Kinshasa. Romer-Lee said Hilton initially signed a management agreement with the hotel’s owners, but the two sides failed to align.
“So, [Hilton] came to us. The owner had been in the Congo for the 25 years. Not in every case can the brands apply the same formula. We are the bit that makes it work,” he said.
Valor Hospitality is also looking at operating hotels in Rwanda. Romer-Lee pointed to the group's experience managing international luxury hotels, including McGlashan opening the Cape Grace, a Fairmont-managed Hotel in Cape Town.
“We earned our stripes in Africa. We understand how things work,” Romer-Lee said.
Valor also has safari lodges in its operations portfolio.
“Africa’s [unique selling proposition] is safaris. It is the only place in the world for proper safaris, and that will not go away, especially as [guests] have more time on their hands. One big thing about operating lodges is they are places to properly burn loyalty points,” McGlashan said, adding this has pros and cons for hoteliers.
Obstacles to Africa's growth
An obstacle for hotel development in Africa is currency exchange rates, but the situation now is a lot better than when many of the continent’s nations’ currencies were deemed to be of junk-bond status, Romer-Lee said.
“The hesitation of international groups will change as the brands come in. We now have deep-rooted relationships with the brands, which want to grow by franchises. The same thing happened in the Middle East, and also in the U.K.,” he said.
Africa's hospitality scene is building momentum towards its evolution, and Valor Hospitality is poised to be the hotel operator of choice on the continent for hotel owners, Romer-Lee said.
“We’re a global company with regional roots. We are very unique, and we corporately share our risk,” he said. “We have team members around the world, and culture and empowerment are so important to us.”
Another challenge is making sure hotel management companies such as Valor continually study the demands and strategies of owners in Africa, Romer-Lee said.
“To have an understanding as to what is behind the owner and fitting into the dynamics of the specific country you are operating in. There is a lot of advancement but there remains a massive gap between the well-off and the rest of Africa, the 95%,” he said.
Infrastructure concerns will also come under the spotlight, McGlashan said. In some markets, they're already raising red flags, Romer-Lee added.
“Cape Town is an example. It is the hottest market on the continent, with more and more hotels and tourists,” Romer-Lee said. “Delta has 11 flights to South Africa, but there is pressure on water and power that needs to be addressed. Cape Town is the ninth-most congested city in the world.”
Load-shedding — the term used for the forced switching off of power in South Africa in cases where the power grid cannot cope with demand — is not uncommon, he said.
One plus is intra-Africa air connectivity, such as Ethiopian Airlines and Turkish Airlines’ recent expansion across the continent.