Africa's hotel industry remains good investment choice - CNBC Africa

Africa's hotel industry remains good investment choice

Special Report

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Sol Kerzner is synonymous with hospitality groups Sun International and Southern Sun. PHOTOS: South African Lodges and Neo Ntsoma

“There isn’t a question in my mind about that. Africa’s opened up and it’s a whole different ball game. At one time it was very difficult,” the hotel magnate told CNBCafrica.com.

AFRICA’S HOSPITALITY INDUSTRY

According to a report on Africa’s hospitality industry by advisory services group, PricewaterhouseCoopers (PwC), South Africa, Nigeria, Mauritius and Kenya – four of the continents key hospitality markets – have very different outlooks.

Nigeria is seen as a business destination with relatively little holiday tourism while Mauritius is principally a resort market. Kenya attracts eco-tourists and offers safaris and beaches, but is currently challenged by terrorism, which is discouraging visitors.

(READ MORE: Sub-Saharan Africa’s thriving hotel industry)

The report further stated that South Africa attracts a mix of business and holiday travellers and offers a wide range of hotel classes and accommodation.

“We expect South Africa to expand at a 10.7 per cent compound annual rate overall and by 11.2 per cent compounded annually for hotels,” the report said.

“Growth in room rates will be the principal driver in South Africa, aided by the positive impact of the depreciating rand on the number of foreign visitors and by growth in real terms following a period of low rate increases.”

THE PROSPECTS OF ANOTHER PROJECT IN AFRICA

Kerzner, who opened his first property on the continent in South Africa in 1962, is no longer a part of Kerzner International, the holding company of the One&Only, Atlantis and Mazagan hospitality brands. However, he indicated that given the choice, he would consider another project in Africa.

“I’ve sold out of the company. It was time to step out. After Butch [Kerzner]’s accident, I took six weeks off to think about whether I even wanted to continue and it was a huge setback – he was running as chief executive. I went back in but I knew at that point this was no longer going to be a family business,” he said.

“I’m not ready to say I’m going to sit on the beach’, I still want to be involved in some way and we’re doing certain things, a little bit of consulting – not [at] the same pace as it has been.”

THE CLUB MED DEAL

Kerzner recently launched a joint bid with Andrea Bonomi for resorts group, Club Méditerranée, also known as Club Med.

“They were interested in making a bid for Club Med and they [wanted] me to help them, and be involved, not [on] a full time basis, but from a standpoint of consulting and maybe creating some ideas and thoughts,” he explained.

“We don’t know where that’s going to go, there’s a bid in and we’ll see where it goes. I’m not going to be going back [in] the same. I have been approached on one or two other things that are quite interesting but it’s a whole different ballgame. I’d be sad if I had nothing to do.”

In addition to the One&Only hotel group, Kerzner is synonymous with renowned hospitality groups Sun International and Southern Sun, now known as Tsogo Sun.

(READ MORE: SABMiller to dispose of Tsogo Sun shareholding)

“In ’69, while I was building that (Elangeni) and Beverly [Hills] was going very well, SAB approached me to say they had lots of pubs around [and] they wanted to get into the real hotel business,” he recalled.

“We agreed to put together what we called Southern Sun, and with that we had the Elangeni, the Malibu – we built about 20 hotels in a few years.”

Kerzner further stated that of those, building the Lost City and the Palace at Sun City was probably the most exciting project he ever did.

FOR A MORE IN DEPTH LOOK AT SOL KERZNER AND HOW HE BUILT HIS HOTEL EMPIRE, CHECK OUT THE LATEST ISSUE OF FORBES AFRICA MAGAZINE - ON SALE NOW.

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