Presentation on the exciting prospects for the African hotel market, given on 28 09 13 at the Hotel Show's Vision Conference in Dubai. Covers demand drivers, existing supply and future pipeline, case studies of 'hot market' cities. African economic performance is much better than Europe's! Hotels are undersupplied! You should be there now!

1. 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

2. www.viability.ae…when diligence is due
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.”

3. www.viability.ae…when diligence is due
IMF World GDP Growth Forecast Map, 2013 (%)

4. www.viability.ae…when diligence is due
Sept/Oct 2013

5. www.viability.ae…when diligence is due
UNWTO World Tourist Arrivals & Revenues, 2012
• >1 billion
tourists
worldwide in
2012
• Asia & Pacific
arrivals up 7%
followed by
Africa (+6%) &
the Americas
(+5%)

6. www.viability.ae…when diligence is due
“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

7. www.viability.ae…when diligence is due
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.”

8. www.viability.ae…when diligence is due
Hotel Supply & Brand Penetration in Africa
No Branded Supply
1. Angola
2. Burundi
3. Central African Republic
4. Comoros
5. Democratic Republic of Congo
6. Eritrea
7. Liberia
8. Mauritania
9. Niger
10. Republic of Congo
11. Sierra Leone
12. Somalia
13. South Sudan
One African Branded Hotel
1. Burkina Faso
2. Guinea Bissau
3. Lesotho
4. Malawi
5. Rwanda
6. 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
NAfricaSubSaharanAfrica

9. www.viability.ae…when diligence is due
Actual Performance Key Cities: OCC & ADR – US$ - YTD 2013
$ 0
$ 50
$ 100
$ 150
$ 200
$ 250
$ 300
0%
10%
20%
30%
40%
50%
60%
70%
80%
Occupancy ADR (US$) Note: STR tracks 650
African hotels -
120,000 rooms

10. www.viability.ae…when diligence is due
Lagos second globally in terms of ADR…
YTD 2013 - ADR – US$
121
153
199
277
343
0
50
100
150
200
250
300
350

11. www.viability.ae…when diligence is due
Africa Room Supply/Demand % Change
12-Month Moving Average – YE 2005 to July 2013
-20
-15
-10
-5
0
5
10
15
2005 2006 2007 2008 2009 2010 2011 2012
Supply % Chg Demand % Chg
World
Cup
Effect
Arab Spring
Arab Spring
Rebound
Global
Financial Crisis

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Key Countries Performance: YTD 2013, YoY % change, OCC &
ADR (local currency)
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Occupancy ADR

13. www.viability.ae…when diligence is due
Africa Hotel Pipeline – Total Pipeline 2011-2013
Note: Sample survey from March
2013 of 29 chains/59 brands
17,038 17,217
18,782
13,700
17,109
21,052
75
77 7776
100
130
0
20
40
60
80
100
120
140
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2011 2012 2013
Hotels
Rooms
SSA Rooms N Africa Rooms N Africa Hotels SSA Hotels

14. www.viability.ae…when diligence is due
Africa Hotel Pipeline – Top 10 Countries by Rooms
7,644
7,470
5,178
3,160
1,469 1,441 1,441 1,359 1,320
1,128
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Egypt Nigeria Morocco Algeria Kenya Ghana Tunisia Libya South
Africa
Gabon

15. www.viability.ae…when diligence is due
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%

16. www.viability.ae…when diligence is due
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%

17. www.viability.ae…when diligence is due
Africa Hotel Pipeline – North-South Split of Top 20 Cities
SSA
38%
NA
62%
SSA
33%
NA
67%

18. www.viability.ae…when diligence is due
Africa Hotel Pipeline – Top 10 Chains by Rooms
6,230
5,947
5,165
3,900
2,514 2,413
2,290
1,481 1,369 1,355
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Hilton
Worldwide
Carlson
Rezidor
Accor Marriott Starwood IHG Louvre Kempinski Mövenpick Rotana

19. www.viability.ae…when diligence is due
Africa Hotel Pipeline – Top 10 Brands by Rooms
5,400
4,191
2,192
1,767 1,676 1,675 1,608
1,481
1,369 1,296
0
1,000
2,000
3,000
4,000
5,000
6,000

20. www.viability.ae…when diligence is due
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

21. www.viability.ae…when diligence is due
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 Year
Country Lodge (City Lodge) 84 2013
Dusit D2 Nairobi 197 2013
easyHotel Westlands 90 2013
Radisson Blu Nairobi 244 2014
Park Inn by Radisson Nairobi Westlands 126 2014
Novotel Nairobi 200 2016
Ibis Nairobi 200 2016

22. www.viability.ae…when diligence is due
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 Year
Radisson Blu Luanda 257 2015
Kempinski Hotel Talatona 250 2015
Pestana Luanda Bay 257 2016

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

24. www.viability.ae…when diligence is due
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 Year
Kempinski Hotel Gold Coast City 269 2013
African Sun Amber Accra Airport 201 2013
Tulip Residences Accra 101 2014
Marriott Accra 200 2014
Ibis City Centre 120 2015
Lansmore Accra (Lonrho) 200 2015
Radisson Blu Accra Airport 200 2016

25. www.viability.ae…when diligence is due
Thanks for listening
Tel +971 3 344 3734
Fax +971 4 344 0907