Rezidor Hotel Group sees growth potential in Africa

McLachlan believes that supply and demand in the local market is coming back into balance after a surge in hotel development in recent years. “We believe that there are probably enough rooms at the very top of the market for the moment but we still see a few opportunities in the mid-market.” However, McLachlan still sees huge potential in the rest of Africa, where there is strong demand for quality hotel accommodation.

Nevertheless the group expects to announce the commissioning of two more South African hotels — one in Johannesburg and another in Cape Town — in the coming weeks. Stock exchange rules in Stockholm, where the group is listed, prevent Rezidor from giving more details at this point.

This will take the group's hotels in the country to eight. Under construction is a second Radisson Blu in Sandton, a Radisson Blu in Blauuwberg, Cape Town, and the Radisson in Port Elizabeth which is to open its doors next week. Already operating is the Radisson Waterfront and Park Inn on Greenmarket Square in Cape Town and the Radisson Blu Sandton, which opened late last year.

Questions

McLachlan said many people had questioned the group's decision to build two Radisson hotels in Sandton within several hundred metres of each other. The second hotel will form part of a R1,4bn mixed-use development called the Sandton Eye on the corner of Rivonia and West streets, making it the closest hotel to the new Gautrain station.

The 200-room establishment will bring Rezidor's total rooms in the city to 490. “We believe there is still enough demand to support both hotels, plus the location in The Sandton Eye development across the road from the Gautrain is very attractive.”

The hotel in Blauuwberg will be the group's smallest in Africa at 144 rooms but the hotel's position overlooking Table Mountain will be a huge drawcard. The hotel is expected to open late next year. In the past two and-a-half years the group has gone from five hotels in Africa to 29 either operating or under construction in 13 countries. This year alone Rezidor will open 10 hotels in Africa.

The most exciting African development must be the Radisson Blu Luanda. The property is a coup for the group as it will be the first international brand to secure a site in the Angolan capital, where quality hotels rooms are scarce.

Source: Business Day

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