Carlson Rezidor Hotel Group, one of the largest hotel groups in the industry, currently has more than 1,370 hotels in operation and under development with180, 000 rooms in 110 countries and territories including in Ethiopia with the Radisson Blu brand. This week, stakeholders in the hotel industry gathered in Addis Ababa for the Africa Hotel Investment Forum and among those in attendance was Elie Younes, Executive Vice President and Chief Development Officer at Carlson Rezidor Hotel Group. Capital’s Eskedar Kifle spoke to Younes about the hotel industry in Africa, its challenges and the Group’s future plans in Ethiopia.
Capital: Give us a brief background on your work?
Elie Younes: I run development for Carlson Rezidor, I am based in Brussels. I have been there for three years; I am the Chief Development Officer. Prior to that I have worked for other hotel developers in Dubai, London, Paris and in New York. Now, I am helping the team grow from Brussels.
Capital: The Africa Hotel Investment Forum is kicking off today, what are you expecting to see?
Younes: The attendance seems good. I would like to see a lot of interaction between the industry’s main stakeholders; operators, consultants, lenders and so on. It is one of the main gatherings for Africa when it comes to hotel real-estate development and investment. My main expectation is that there will be a lot of good interactions and that it will be a learning experience for everyone.
Capital: Tell us about some of the new projects you are announcing during this Forum.
Younes: We are announcing a hotel in Nairobi, Kenya with around 200 rooms, it is a hotel mixed with service apartments, it is a Radisson Blu that will open in the next 18 months, and we will be managing it. This will be our 35th hotel in our pipeline in Africa. In Africa, we have 30 hotels in operation and another 35 under construction; we have the largest pipeline of hotels under construction in Africa.
We would like to add 11,000 rooms in the next five years. Africa is our key market for our company’s growth. We have fourteen bases on the continent as well as a fully-fledged regional support team based in Cape Town to cover Africa.
Capital: Some studies suggest that hotel prices in Addis Ababa are among the most expensive in Africa, is that correct?
Younes: That is not incorrect. It is true in some ways because not all African countries are providing statistical information on the market. But, one thing is for sure that it is great news for the hotel owners and investors because they are making a lot of money.
Of course this is a sign of under supply, because as more hotels open in Addis Ababa chances are that the prices will correct, and could potentially go down a little bit, but not too much.
Capital: Do you think these prices would affect tourism?
Younes: If the prices are too expensive, of course it will affect tourism in some ways. But if you look at the type of tourism in Addis Ababa, it is mainly business tourism; business tourism is not as affected by prices as leisure tourism. So, in theory it does affect it, but in reality, in this specific case where the majority of visitors are business visitors, it will not have such an impact.
Capital: Other brands in the hotel industry such as the Hilton are looking into opening hotels in regional states and not only in Addis Ababa. Do you have similar plans?
Younes: Today we have one hotel in Addis Ababa, the Radisson Blu. We would look at opening another hotel in the city; not a Radisson Blu, but one of our mid market brands such as Park Inn. As time goes by, we wouldn’t mind looking into resort destinations, we would look at selectively expanding out resort portfolio in the country.
Capital: Which region in Africa do you have the most hotels?
Younes: We are reasonably well spread across the continent. Our focus region to grow our business is Sub-Saharan Africa. It will also be interesting to mention that in Africa, in general, we have a resort strategy. For instance, we have recently signed to open Radisson Blu hotels in Mauritius.
Mainly, I would say that 80 percent of our hotels in Africa are business hotels and no more than 20 percent of our hotels would be resorts. We have two focus countries; Nigeria and South Africa. Of course with the current economic situation in Nigeria this may change by end of this year or in next year.
We also have eight proactive markets; those are markets in where we would like to grow by more than 10 to 12 hotels. These countries are Ghana, Angola, Mozambique, Kenya, Ethiopia, Tanzania and Tunisia. Ethiopia is one of our proactive markets in Africa where we would like to grow by more than 10 hotels in the next five to ten years.
Capital: As a hotel developer, what are some of the challenges you have seen in Africa?
Younes: From a development perspective some of the challenges are funding; finding the adequate level of loans to build hotels that investors need. Another challenge from development and construction perspective is the know-how. There isn’t a sophisticated know-how in Africa; it has significantly improved over the last five years, but this has historically been a challenge.
Once a hotel opens, there are different challenges such as finding a trained work force, finding talent has also been historically challenging. One of our main objectives is to hire local talent; giving back to the community in which we operate. For example, here in Addis Ababa we hire more than 300 Ethiopians, which ultimately supports the community. But this is not possible in all countries. Another challenge in Africa has to do with logistics.
Capital: Have you also had problems with retaining the staff at your hotel here in Addis? And also how do maintain your standard, in an industry where standards means everything?
Younes: This is not a problem that only exists here; staff turnover in the hotel industry is an issue worldwide. I wouldn’t say we have had more issues here than anywhere else in the world.But this is an issue, however, we face it here like in other parts of the world we operate in.
To maintain the standard of the hotel, we have training programs; we have experts coming to the site to train the staff or we take the staff to a different country to train them and then bring them back as qualified experts or qualified trainers so that they can provide trainings to the other staff members as well.
Capital: The hotel business is obviously dependent on tourism and the success and strength of the tourism sector also heavily depends on how well a country is promoted as a destination. What is your view on Ethiopia’s brand as a country, is it on the right track?
Younes: Emerging markets such as Ethiopia require a lot of destination marketing and that is usually done by the government rather than by the private sector. The government’s awareness of the necessity to do more destination marketing is very important. That kind of destination marketing is taking place by a lot of governments in Africa including Ethiopia. But the efforts to further promote tourism are not just about destination marketing; it is also about developing infrastructure.
Logistics is also very important; helping the tourist go in and out of the country without spending too much time at immigration, for example. I see improvements in that area; last year coming to this conference I spent an hour at immigration, this year I spent 15 minuets. To me this means that the government is improving support on that front.
Should the government do more? Yes, this should be an ongoing process to stimulate the tourism industry in the country. Ethiopia is one of the largest countries in Eastern Africa, it has a lot of natural resources, and it has a reasonably strong economy, all of which are good indicators for a good tourism sector. All you have to do is package it and sell it.