Africa is new battleground for global hotel industry Africa is becoming the new battleground for global domination among hotel groups. Just as the Middle East was for several years the region where the likes of Marriott, Hilton, Starwood and InterContinental Hotels Group fought for market share, so sub-Saharan Africa is now the setting for the latest rollout of their global brands. Marriott set the pace late last year in sub-Saharan Africa with the $200m-plus takeover of Protea, a 116-hotel group spanning seven African nations. "Honestly, I think Africa is the next big thing," says Michael Wale, head of Europe, Africa and Middle East at Starwood. But he sounds a note of caution amid the hype. I'm absolutely clear it won't be easy and won't be done in the short term. For decades, Africa has attracted foreign tourists to game reserves, fuelling the construction of safari resorts. In 2012, international arrivals surpassed the 50m mark for the first time, generating $33bn in revenues, according to the UN World Tourism Organisation, which forecasts that arrivals will top 85m by 2020. But tourists are not the travellers exciting the big international hotel groups. Alex Kyriakidis, who heads the Middle East and Africa business at Marriott, explains that now "the big prize is domestic and regional business" travellers. The emergence of business travellers hopping between Lagos, Nairobi, Johannesburg, Luanda and other African commercial capitals is a clear reflection of the continent's recent period of strong economic growth and relative political stability - dubbed by many observers as "Africa Rising." The International Monetary Fund forecasts that sub-Saharan Africa will grow by 6 per cent in 2014 - second only to the 6.5 per cent growth rate in the developing Asia region, which includes China and India, and well above the global rate of 3.6 per cent. Rick Menell, a banker at Credit Suisse in Johannesburg, says the new African commuters have few places to stay. "The hospitality market has great potential because [until now] is under served," he says. Regional business travellers are also paying top dollar for their hotels. According to Mercer, the consultancy, Luanda, the capital of Angola, and N'Djamena, the capital of Chad, are among the world's five most expensive cities for business travellers and expats in terms of food, transport and accommodation costs. In Luanda it is difficult to find a business class hotel room for less than $500 a night. Hotel industry executives are flying around the continent to explore how to meet this growing demand. The merger and acquisitions route looks difficult. Marriott's deal with Protea, which has established the group as Africa's biggest by number of hotels, has reduced the list of potential targets. In Luanda, the capital of Angola, it is difficult to find a business class hotel room for less than $500 a night Among the remaining regional groups is TPS Eastern Africa, the Nairobi-listed group that owns the Serena brand with 32 hotels, and Tsogo Sun Holdings, the Johannesburg-listed group which runs a portfolio of more than 90 hotels and casinos. City Lodge Hotel Group, also listed in Johannesburg and with 55 hotels, is another potential target, although its sole focus in South Africa is a handicap. With little else in terms of takeover targets to satisfy the global hotel group's predatory instincts, Trevor Ward, head of W Hospitality Group, a Lagos-based consultancy, says further growth in the region will be organic. All of the global players now have dealmakers based in sub Saharan Africa, and the payback is evident from the growing number of signed branding and management deals. At the start of 2013, the pipeline of new hotels being built in the region - those for which binding deals had been signed - was 207, up nearly 40 per cent from 2011, according to W Hospitality Group. Accor, the French group, leads the way on planned hotels with 30, while Carlson Rezidor of the US plans 28 and Marriott 22 hotels. Starwood plans 15 new hotel openings. Hilton has 17 hotels planned and IHG nine. Organic expansion will not be easy, however. Global hotel companies face a key obstacle: a fragmented continent with a population of about one billion people split in 54 countries, which in turn means dozens of different legal systems and languages. Worse, many of those countries are what executives call "one-single place": just one hotel in the capital with little prospect of expansion. Meanwhile, China has roughly the same population with only one legal system and language, and the potential of expanding beyond Beijing. Pascal Gauvin, head of India, Middle East and Africa at InterContinental, says the fragmentation and difficult working conditions will force companies to adapt. "You can't go at the same speed everywhere," he says. Across the continent, Nigeria is the most sought-after location for investment with 49 new hotels and 7500 rooms planned. Kenya, Ghana and Gabon are also popular. Oil-rich Angola is the location that every executive talks about as having the ideal combination of a booming economy and natural resources to attract business travellers, who currently have to pay top-dollar for their accommodation. But the country remains a difficult place to do business and developments had been very slow. Angola has spotted the opportunity and plans to use its sovereign wealth fund - the $5bn Fundo Soberano - to invest in the hospitality sector, both locally and regionally. José Filomeno dos Santos, the chairman of Angola's nascent SWF, last year said the Fondo Soberano was targeting a "hotel fund" for Africa, which could "potentially" roll out a portfolio of 50 hotels across the continent. African executives are also trying to profit alongside international chains. Yerim Sow, a Senegalese entrepreneur who is behind a new indigenous African hotel group called Mangalis, is investing €315m to build 15 hotels in west and central Africa across four new brands. A few years ago, financing would had been difficult. But with the continent now firmly on international investors" radar, in spite of conflicts like South Sudan, money is not a problem.