A modern lifestyle hotel featuring trendy amenities in Sub-Saharan Africa.
Kasada Capital Management has made a significant acquisition by purchasing eight hotels in Sub-Saharan Africa, adding over 1,600 keys. This landmark deal underscores the region’s growing appeal among investors, driven by the rising demand for lifestyle hotels, property upgrades, and effective local partnerships. The hospitality landscape is evolving with increased competition and investor interest, promising further expansions and developments. As Kasada plans to enter the North African market, the future looks bright for the hospitality sector in Africa.
Kasada Capital Management is significantly expanding its influence in Sub-Saharan Africa’s hospitality sector through a series of landmark hotel acquisitions and development initiatives. In 2021, the investment firm successfully acquired eight hotels, boasting a total of more than 1,600 keys, establishing itself as a key player in one of the region’s largest known single deals in the hospitality domain.
Heightened interest from investors suggests that more substantial deals are on the horizon, with projections for continued growth in this booming sector. This expansion momentum is fueled by three critical components driving the hospitality industry’s evolution in Sub-Saharan Africa: a rising demand for lifestyle hotels, a growing preference for upgrading existing properties rather than constructing new ones, and a reliance on effective project delivery partnerships that blend international expertise with local market knowledge.
Lifestyle hotels have emerged as a prevalent trend in the region, transitioning beyond traditional accommodation offerings to become vibrant social spaces. Today’s lifestyle hotels are designed to foster connections and community engagement, featuring exciting amenities such as vibrant bars, trendy restaurants, rooftop lounges, and even art galleries in the lobby. Furthermore, they often include unconventional gyms that cater to a modern audience.
Investors are increasingly leaning towards acquiring and refurbishing existing hotel properties rather than starting new developments, due to the high costs of new construction. Data from a recent survey by JLL indicates that about 80% of hotel investors are on the lookout for value-add investment opportunities. This inclination is based on the understanding that upgrading existing properties allows for a quicker return on investment compared to new developments.
The upgrades to aging hotel properties may include expanding room capacities and integrating lifestyle-oriented features that increase non-room revenues. Successful renovations are reliant on a combination of international expertise alongside an understanding of local market dynamics, which can be crucial for navigating regulations and catering to the cultural nuances of clientele.
The effective partnership between Kasada Capital Management, QIA, and Accor exemplifies how blending international and local knowledge can lead to robust hotel development outcomes. Experienced management teams play a vital role in tackling the various challenges that come with renovation projects in live hotel environments, ensuring that compliance, cost control, timelines, quality, and stakeholder expectations are efficiently managed.
As part of the broader hotel development boom across Africa, major global brands like Marriott, Hilton, and Radisson are at the forefront, particularly in countries like Egypt and Morocco. Currently, there are approximately 577 hotel projects underway across the continent, translating to around 105,000 rooms. Notably, North Africa has recorded a 23% increase in hotel projects year-on-year, while Sub-Saharan Africa itself has experienced a 6% increase.
Among the leading countries for hotel development in this region, Egypt stands out with 143 hotels under development, accounting for 33,926 rooms. On average, resort developments tend to be larger, with around 210 keys compared to 170 for city hotels. The realization rate of hotel openings has notably improved, climbing from 21% in 2023 to 38% in 2024, with nearly half of the rooms in development expected to be operational by 2025 and 2026.
As the hospitality landscape in Africa increasingly shifts towards the franchise model, confidence in quality operators continues to grow, suggesting robust opportunities ahead. Despite regional challenges, ongoing deals and developments indicate a promising future for the African hospitality sector. Kasada Capital Management is also poised to extend its reach into North Africa, specifically targeting Morocco with upcoming hotel deals set to materialize by 2026.
In summary, Kasada Capital Management’s recent initiatives and the broader trends throughout the hospitality sector highlight a vibrant and evolving landscape in Sub-Saharan Africa. The region’s unique blend of cultural richness and investment potential positions it well for sustained growth in the years to come.
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