Radisson eyes hotel-chain acquisitions & joint ventures to bolster African growth

By David Whitehouse
Posted on Thursday, 30 September 2021 14:42

Radisson RED Johannesburg Rosebank. Photo supplied.

International hotel group Radisson is ready to consider acquisitions and joint ventures to support its African expansion plans, Ramsay Rankoussi, vice president of development for Africa and Turkey, tells The Africa Report.

Some local chains are suffering from a “lack of liquidity”, which creates an opportunity for Radisson to “support recovery” in the sector, Rankoussi says in Dubai. Exploratory discussions with some local chains over possible joint ventures in areas such as distribution and co-branding have started, he says. “We are open to any approach.”

The company, which to date has pursued an organic growth strategy in Africa, is betting that domestic and regional leisure travel will underpin the continent’s recovery in 2022 even as long-haul air traffic struggles. In addition to organic growth, Radisson will “start exploring other routes” in an “open-minded” way that is “not classical M&A”, Rankoussi says. It’s possible that joint ventures or acquisitions could come to fruition in 2022, he tells The Africa Report.

Radisson plans to open between eight and 10 African hotels in 2022. Egypt and Morocco are among countries that have been able to sustain domestic travel during the pandemic, while Nigeria has even been able to sustain demand for business travel, Rankoussi says. “We see a sign of recovery.”

  • Radisson wants to add more hotels and serviced apartments in Nigeria. The company is starting to diversify into serviced apartments which, Rankoussi says, lend themselves to short and long-term stays.
  • The company plans to open its first hotel in Ghana by the end of the first quarter, and is aiming for a hotel in Cameroon in the next two years.
  • Rankoussi also sees Côte d’Ivoire as a promising market for expansion. He aims to get four or five new hotels signed up in West Africa in 2022.

‘Clean pipeline’

Radisson, owned by a consortium led by China-based Jin Jiang International Holdings, operates nearly 100 hotels in more than 30 African countries. It aims to increase this number to 150 by 2025, with Morocco, Egypt, Nigeria and South Africa as key growth markets. This month, the company said it’s “prudently optimistic” about business recovery in Africa in the fourth quarter of 2021.

Some projects in the pipeline have been delayed by Covid-19, but people have become more likely to travel to neighbouring countries as long-haul travel has slumped, Rankoussi says. For that, a country must have a sizeable middle class. “Domestic tourism is reliant on discretionary income.”

  •  The company plans to open its first three hotels in Madagascar by the end of 2021.
  • Among openings planned for 2022 are a hotel in Victoria Falls in Zambia, which Rankoussi expects in July or August, and first properties in Durban, South Africa as well as South Sudan’s capital Juba.
  • He also hopes, at some point, to establish a presence in DRC’s Kinshasa.

The company’s model is to manage hotel assets rather than own them. Forthcoming projects are fully funded after the company weeded out some that may not be able to get financing, Rankoussi says. “We have a clean pipeline.”

Bottom line

Radisson sees leisure-driven domestic and regional travel as the key to African hotel recovery.

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