Ahead of the Africa Hotel
Investment Forum (AHIF) set to hold in Addis Ababa, the capital of Ethiopia, on
29th Sept – 1st Oct this year; the AHIF organiser, Bench Events conducted a
research to find out the principle for doing business successfully in Africa.
The main findings were that
African markets are progressively being seen as open for business and
regardless of perceptions of eminent risk, the continent is not considerably
different from others. Yet the continent's complexity and rich diversity point
to the need for flexibility when it comes to business strategy.
Three main factors considered
most likely to distinguish success from failure when doing business in Africa
are:
1) Appreciation
that every country in Africa is unique: Several executives agreed that it
is vital to remember that every country in Africa is unique, and in order to do
business successfully, every single country needs to be understood in its
entirety.
Kofi Adomakoh, Head of Project
Finance and Export Development, African Export Import Bank, recently said:
"The time has come for everyone doing business in Africa to take time to
understand all of Africa and not just view it as one block".
Michael Cooper, Vice President
Development Sub Saharan Africa, Hilton Worldwide agreed and commented
that investors should "remember that Africa is not one country." On
the major issues, it is necessary for the industry as a whole to talk to each
government. "Collectively we must continue to put pressure on all African
governments for open skies and visa free travel," he added.
2) The
importance of receiving support from local experts: There was a strong
consensus that appreciating local players, receiving support from local experts
and building strong local partnerships are critical for business success in
Africa.
Kevin Underwood, Global Leader
of Leisure and Culture, Aecom, stated: "Any development project must have
a local sequence and one must understand the culture of the African countries.
There are no shortcuts."
Filippo Sona, Director, Head of
Hotels (MENA Region), Colliers International, agreed and advised "Contact
local companies and get local expertise to develop in Africa. Use local
resources."
Al-Karim Hamir, Chairman &
Managing Director, Prime Assets also concurred: "You definitely have to
have a local partner to learn and climb the ladder." To be successful, it
is also necessary to identify, nurture and retain talented and committed local
staff.
Andrew McLachlan, Vice President, Business
Development, Africa & Indian Ocean Islands, The Rezidor Hotel Group,
commented: "Having local feet on the ground is essential and creating
teams of excellence is important - the stronger your professional team is the
better. Like a strong football team – you need to pick the best in every
role".
3) Placing a high value on relationships: This has to do with the
importance of collaborating with various organisations.
Lourie Kruger, VP M&A and
Treasury, Kingdom Hotel Investments said: "The only way to grow your
business effectively is to have really strong relationships. When you don't
have the infrastructure like you do in other markets, those relationships make
everything much more efficient."
Klaus Lengefeld, Sector Leader Tourism, GIZ,
agreed and said: "Sit together. Many organisations are investing a lot
into sustainable development but do not work together with the hotel investment
world".
Other general success factors
that emerged from the study included: invest in people, focus on positives, be
patient and persistent, have realistic expectations and be prepared for any
hidden costs or surprises. Also, experienced foreign investors repeatedly note
that nowhere else is there such a direct correlation between careful planning
(and flexibility about plans once formed) and a successful outcome.