Kempinski are expanding their portfolio of luxury hotels in Sub-Saharan Africa – why?
It’s no longer a surprise when large luxury hotel brands announce another move into Asia. In fact, these days it’s more newsworthy when a brand opens a new hotel in Paris than in Shanghai: we know that wealth creation has shifted eastwards of tired old Europe.
Kempinski, Europe’s oldest luxury hotel group, say that they are also focussing elsewhere – Sub-Saharan Africa. They already own hotels in Djibouti, Chad, Egypt, Seychelles and Namibia, and this year plan to open new hotels in Ghana and Kenya.
Their Africa focus makes sense, says Reto Wittwer, President and CEO of Kempinski, because of the region’s impressive growth rates. ‘Economic growth across a variety of sectors in Africa continues to attract more and more investment in Africa, which will increase the number of visitors to sub-Saharan Africa,’ he explains. ‘In the globalised world business and leisure travellers expect to find the same levels of service wherever their travels take them, which is why there is so much potential for growth in our segment.’
Ghana’s economy, for instance, grew almost 9 per cent in 2012, so it’s a ‘good time to bring true luxury to the people,’ the Kempinski’s Accra hotel manager, Markus Leuck, says. He’s expecting the hotel to prove popular not only with Western business visitors, but with wealthy Ghanaians and visitors from neighbouring African countries.
Leuck has been in Ghana over a year overseeing the building project, and he says even in this short timeframe he’s noticed big changes in Accra, with more luxury cars on the streets, and high-end shops, bars and restaurants opening regularly.
Accra, Ghana, where Kempinski will launch a new hotel later this year
What are the risks with this new venture, I ask him. Leuck is feeling confident: ‘We consider the current situation a very safe investment,’ he says. His main concern is political instability or upheaval, but as Ghana has functioned as a multi-party parliamentary democracy since 1992, he’s mainly concerned with political instability elsewhere in West Africa, including countries like Nigeria, and Ivory Coast.
‘This weakness is also a source of strength,’ he adds ‘as in surrounding countries like Nigeria business is very difficult, corruption is high, and so everybody is trying to move their business into Ghana.’
It’s always worth remembering that Africa’s impressive growth rates are starting from a very low base – but increasing wealth creation nevertheless make parts of the continent a very interesting prospect for the well-informed, and confident, investor. And for both businessmen and the more intrepid traveller, a little more luxury south of the Sahara will always be a welcome thing.
Read more by Sophie McBain