Nasdaq-listed Marriott this year bought the 116-hotel Protea Hospitality Group for R2bn‚ becoming the largest hotel company in Africa‚ according to published information. The acquisition gave Marriott its first exposure to the South African market‚ which global chains have found difficult to penetrate because of the strength of local brands.
Asked whether the wave of strikes and poor economic growth in SA were a concern for the company‚ Marriott President and Chief Executive Arne Sorenson said that these short-term complications were not expected to weigh on the hospitality sector.
This month‚ PwC Hospitality and Gaming Leader Nikki Forster said that despite a weakened domestic economy‚ growth in international travel and tourism and increasing room rates have bolstered the hospitality sector.
Sorenson said: "We're here for the long-term and really looking at what we expect from a growing economy and an increasingly vibrant destination for travellers around the world".
"At the moment we see travel in SA being a strong building force and the complexities that the country is wrestling with today are not directly connected to travel in any material way."
As a result of an increase in supply ahead of the 2010 World Cup‚ there has been little in the way of new hotel developments in SA since then. Occupancies have been edging upwards and several analysts now believe certain nodes are presenting opportunities.
Sorenson said Marriott was considering introducing its own brands into SA for the first time‚ with opportunities for both Protea and other Marriott brands being explored in Johannesburg‚ Cape Town and‚ to a lesser degree‚ Durban. On whether Marriott would consider any other takeovers in SA and the continent‚ he said "we're never satisfied".
Since the Protea deal‚ Marriott manages and franchises 161 hotels in the Middle East and Africa.
The combined pipeline is another 45 to 50 hotels.
Sorenson said there was also potential to export the Protea brand out of Africa for the first time‚ as Marriott's partners in the Middle East were showing interest in introducing the brand to the region.
"We don't really have immediate plans to take it further than that‚ but I think we will see what the resonance of the brand looks like in other markets and decide whether or not it makes sense," he said.
As more people in sub-Saharan Africa started travelling‚ in line with a broader middle class‚ Marriott obviously wants to be able to welcome them when they travel outside of Africa. "Having a brand in our portfolio which is so well known here is really also a very useful way of making sure we capture as much of that business as we can when they travel outside of Africa," he added.
Marriott's Middle East and Africa region President and Managing Director‚ Alex Kyriakidis‚ expects Protea's affiliation with the Marriott.com site to be a significant development for the tourism industry as a whole in SA and sub-Saharan Africa. Marriott has put all of Protea's hotels on its site and has educated its global sales team about the Protea brands.
"The second part will be towards the end of this year. We are going to activate Marriott rewards in the Protea hotels. We have started seeing bookings come through Marriott.com. In addition‚ what's really encouraging for me to see‚ is a significant interest in groups and conferences‚" Kyriakidis said.
He said Marriott's 45 to 50 hotel pipeline for the region would create 15‚000 jobs over the next four years‚ and require about $3bn in capital investments by Marriott's real estate partners.
"The South African talent‚ the South African passport‚ the South African approach to hospitality and travel across the Middle East and Africa does exceptionally well. So we see this as a great opportunity to develop our future talent in SA," he added.
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