This week I had the privilege of accompanying our Global CEO, Colin Dyer, to the Word Economic Forum on Africa, held in Cape Town. It was an interesting few days of rubbing shoulders with the global giants and the regional lions.
The phenomenal increase in interest in Africa over the past five years goes without saying. When I first moved to the continent in 2004 to look at hotel investments, the landscape was very different. It was still a relative outpost primarily left to the regional players. These days every hotel company needs to have a credible strategy.
The WEF brought an interesting and fresh perspective on the global and regional business environment in Africa and what it takes to win. It was very different because I am primarily focused on the hotel and real estate, while the WEF mixes you with other industry segments, NGOs and governments.
The opportunities based on the positive macro and demographic trends are accepted across most sectors. The challenges of a lack of transparency; need for more robust governance; early-stage capital markets; talent search; constrained infrastructure; administrative barriers; and a search for scale are similar in the hospitality sector.
Everyone who I spoke to has seen these challenges reduce in the past decade beyond expectation. The question of whether to look at Africa for global corporates only has one answer, but the question for most is how to partner with the right people and where to focus efforts within the 55 distinctly different markets. This is similar to many of the hotel players that we advise. Taking a specific market and geographic focus is critical to success in hotel operation, development and investment. There is significantly higher risk – adjusted returns to be made – but it’s not a quick win.
Now I need a weekend to recover from a week of midnight functions and early morning breakfasts!