Hospitality and Tourism has taken a new toll all over the world as it attracts great investments. New developments says that Marriott International, a US company is to pay $200m in deal with the Protea Hospitality group to become leader on continent.
Marriott International Inc. reached a deal to acquire one of Africa’s largest hotel companies, a move that will make the U.S. chain the leader on a continent where tourism and business travel are growing rapidly with an emerging middle class.
The Bethesda, Md., company is paying more than $200 million for the brands and hotel-management business of Protea Hospitality Holdings (Pty.) Ltd., which is based in South Africa, people familiar with the deal said.
Marriott Chief Executive Arne Sorenson declined to discuss the price for Protea, which operates 116 hotels in seven sub-Saharan African countries. Marriott, which owns few of the hotels it manages globally, won’t acquire any of the African properties outright.
Marriott operates 10 hotels in northern Africa but none south of the Sahara. The acquisition would catapult Marriott from the 13th-largest hotel company on the continent to the largest by number of hotels, according to Smith Travel Research.
Marriott said the deal would give it control of more than 23,000 rooms in 138 African hotels open or under construction from Marrakesh, Morocco, to Cape Town, South Africa.
Building and operating hotels in Africa isn’t easy. Poor infrastructure in many countries makes transporting building materials or hotel supplies a burden, which can add years to a new hotel’s construction and increase development costs by 15% or more, according to a recent Ernst & Young report.
Africa also is among the world’s more volatile regions, where riots, coups and terrorist attacks can disrupt plans and force hotels to close temporarily. Marriott shut a 370-room hotel in Tripoli in 2011 during the Libya uprising. The hotel is being repaired and is expected to open next year, the company said.
But staying away is also risky.