Groupe Azalai Hotels will invest as much as $165 million during the next four years to expand in West Africa to capture rising demand from business travel, Chief Executive Officer Mossadeck Bally said.
The Bamako, Mali-based company will build hotels in Ivory Coast, Senegal, Guinea and Niger and will renovate another in Mauritania, Bally said in an interview yesterday in Abidjan, Ivory Coast’s commercial capital. The first will open in Abidjan in early 2015, he said.
“Business tourism is rising in Africa,” Bally said. “Demand from international civil servants and businessmen is growing strongly.”
Hotel development in Africa is growing at the fastest pace in the world as Marriott International Inc., Starwood Hotels & Resorts Inc. and Hilton Worldwide Holdings Inc. add rooms to lure more business travelers. Economic growth in sub-Saharan Africa will outpace every region except developing Asia this year, fueled by demand for raw materials like oil, copper and gold, according to the International Monetary Fund.
Last year, planned developments were forecast to rise 23 percent in sub-Saharan Africa, more than double the increase in the Asia-Pacific region and 4 percent expansion in Europe, according to Tennessee-based research company STR and W Hospitality, an adviser to the hotel and tourism industries based in Lagos, Nigeria. Sub-Saharan Africa economic growth will average 6.1 percent this year, twice as fast as the U.S., the IMF said Jan. 21.
Azalai, which operates seven hotels in Mali, Burkina Faso, Guinea Bissau and Benin, will renovate one of its hotels in Bamako and build another one in Selingue, 140 kilometers (87 miles) southwest of the Malian capital, Bally said. The company is targeting expansion in West Africa before considering investments in Central or East Africa. “We want to first strengthen our base in West Africa,” he said.
The company is in talks with two investment funds and will raise as much as $60 million this year, Bally said. He declined to name them.
The expansion outside Mali will help reduce the risks of operating in one country, Bally said. Azalai didn’t make any profit in 2012 and its revenue halved following the political crisis in Mali and Guinea Bissau, Bally said. Profit will rise 50 percent this year to $15 million and its revenue will increase 25 percent to $50 million, Bally said.