September 25, 2018 / 5:12 PM / 2 months ago

Accor aims to conquer Africa with $1 billion war chest, says region CEO

JOHANNESBURG (Reuters) - AccorHotels’ (ACCP.PA) new Middle East and Africa CEO is taking aim at rivals including Radisson as he looks to capitalize on a billion-dollar war chest to further the biggest European hotel operator’s expansion in sub-Saharan Africa.

FILE PHOTO: The logo of French hotel operator AccorHotels on a flag at the financial and business district of La Defense in Puteaux, near Paris, France, May 16, 2018. REUTERS/Charles Platiau/File Photo

The French group announced in July that it was teaming up with Katara Hospitality - the Qatar Investment Authority (QIA) sovereign wealth fund’s hospitality arm - to create a fund to invest in Africa.

The fund will invest in 40 hotels as Accor expands from the 114 hotels it operates in Africa under brands including Ibis, Novotel and Pullman.

With 70 percent of the existing properties being in North African markets, Mark Willis - appointed as the company’s Middle East and Africa chief this month - told Reuters that Accor is looking at opportunities in Cape Town, Nairobi, Dar es Salaam, Addis Ababa, Dakar, Abidjan and Kampala.

“There’s a variety of different things on the table. We have a number of deals about to close in those key destinations,” he said, adding that he believes there is a gap in the market for economy and mid-range accommodation.

In April AccorHotels acquired a 50 percent stake in South Africa’s Mantis Group, which runs a string of five-star properties and lodges around the world.

Accor’s established North African foothold, Willis said, was expected to serve as a springboard for the expansion push, since those same customers travel and do business across the continent.

“The key, especially when you have a 40 million-strong loyalty base, is to make sure you’ve got footprint in those key locations where your guests need a brand that they know and trust,” he said.

Among its main rivals, Radisson’s Africa portfolio stands at 86 hotels and almost 18,000 rooms in operation and under development after rapid expansion on the continent in recent years.

While accepting that Radisson has done a “fabulous job” in Africa, Willis said that Accor is more than capable of competing in an African market that is increasingly attracting big-name hotel chains.

“We have the opportunity to really put a firm grip on the whole continent,” he said.

Hyatt Hotels & Resorts (H.N) plans six new hotels in Africa by 2020 and Hilton Worldwide Holdings (HLT.N) will spend $50 million over the next five years to fund expansion.

Reporting by Joe Bavier; Editing by David Goodman

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