Protea eyes prospects in some African markets

Posted On Wednesday, 02 August 2006 02:00 Published by
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Hotels and hospitality group Protea Hotels is "actively" looking to establish a presence in a number of other African countries, said managing director Arthur Gillis yesterday.

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Protea's expansion drive will see the company take advantage of an upswing in several regional economies.

The company has operations in Namibia, Nigeria, Tanzania, Mozambique and Malawi, among other countries on the continent.

The company last month announced a multimillion US dollar hotel project in Uganda, in a move likely to attract more international tourists to that country. The 70-bedroom hotel is expected to open late next year, ahead of the Commonwealth Summit in the country's capital, Kampala.

Gillis said Protea was also in the final stages of negotiations for a hotel in Luanda, Angola.

But he said the company was considering pulling out of Mozambique. "We are looking at that market very carefully. There are too many hotels in Maputo and not enough demand,' Gillis said. Protea had been in Swaziland but later pulled out.

"It made business sense to leave Swaziland. It is a small country," he said.

Gillis said the company had no immediate ambition to get into Lesotho either. "We do not see big opportunities in Lesotho as the hotel market is saturated."

But the company was "actively" looking for opportunities in Botswana.

He said an emerging middle class had boosted the South African tourism market.

"South African Tourism's Sho't Left campaign has been a success. We see more people choosing to stay in hotels, whereas in the past they would stay with friends and relatives," he said. In addition, more people are taking short and regular trips. "Low-cost airlines have made domestic travelling easier."

Gillis said the shortage of seats for major tourist destinations had a negative impact on domestic tourism.

He said major external destinations included Germany, the United Kingdom, France and Italy while India and China were new markets waiting to explode.

Gillis said a strong rand affected the company's customers at the lower end of the market - "basically, the people who shop around for the cheapest hotels. The top end of the market is often prepared to pay more," he said.

He did not expect the recent interest rate increase to have an impact on tourism trends. "South African tourism is poised for more growth," he said.

Protea Hotels has made 80% of its hotels available to be used during the 2010 Soccer World Cup. "Room rates were agreed way back in 2003 and were part of SA's bidding document. Talk that hotels will charge exorbitant rates during the soccer tournament is unfounded," he said.

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