Competition or collapse? The influence of international brands on Africa's hotel industry

Many local hotel brands are now used to dominating this under tapped market, therefore, facing competition from the international brands who have an endless list of advantages: heavy financial backing, advanced technology, superior products, the group chain effect and seasoned marketing and management professionals. Understandably, the success of local businesses is considered as being in grave danger when international brands surface. The multimillion dollar question here is: does the introduction of international hotel chains bring collapse or competition for the local hotel businesses? Jovago assesses the various factors involved.

Affordable accommodation

The introduction of major international hotel brands or chains like Hilton, Marriott, Kempinski and Movenpick instantly causes a certain level of trembling among local brands, most of which may not have the power to compete. However, with high technology and exquisite decor, facilities and services come high rates. Comparably, as the international chains charge exorbitant rates in foreign currency, many luxurious local brands provide an alternative for those who cannot afford the luxury of spending several thousands of dollars on a night’s stay. This is a great benefit for the local brands as many local travelers as well as middle to low-income international travelers will prefer to stay in a good hotel with an affordable price, rather than stay in a fancy hotel for a very high price. The local businesses win here!

Meeting international standards

What this also means is that very high standards are set by these international brands and the local brands are obliged to step up a gear or two to be able to compete at the highest level. Where there is no competition, many of the bigger local entities enjoy a monopoly over the relatively smaller hotels in terms of size, quality of service and facilities. Standards are not really adhered to the fullest and everything seems okay.

Immediately there is an introduction of one or two international brands, standards are set very high and the local brands need to upgrade to match up and be able to compete for the very few valuable customers. Facilities are then upgraded to meet modern international technological standards. Staff are also trained to become professionally equipped to handle international clients to their satisfaction. This is good for the industry in general.

Marketing beyond the continent

Another very important aspect of this battle is marketing. If it is possible for international brands to enter the local market, why isn’t it possible for local brands to attract international customers? Many local brands tend to learn new marketing strategies so as to aid them in marketing beyond this continent and attract international travelers as well. These travelers may be used to the international brands and may be open to trying out local hotels when they intend to travel to a particular country.

Through OTA’s like Jovago, travelers are able to access a wide range of local hotels and compare with what they already know to be able to make informed choices. This also gives opportunities for some of the very best local hotels to partner with the international chains and enjoy the unending benefits that come with it.

A wake up call

Finally, instead of seeing the influx of international chains as a recipe for collapse, local brands must just see this as a "wake up call". It is time to upgrade their facilities, train staff and adhere to standards. This only makes them competitive and at least keeps them in business until they are ready for a total take-over, partnership or massive upgrade. With all these factors, the hotel industry in Africa will only benefit from the introduction of international brands. Local brands will not collapse if they maintain the right practices and learn rapidly.

Jovago