Is Marriott’s African Expansion More Significant Than Airbnb’s?

Written by Dana Sanchez

When Marriott International bought South African hotel chain Protea Group, the move made Marriott the largest hotel company in Africa. The more recent purchase of Starwood Hotels, completed in the last few months, makes Marriott the largest hotel company in the world, and it’s using all its brands to expand across Africa, Motley Fool reported.

A new round of deals will bring Marriott’s total property count in Africa to over 200 with about 37,000 rooms.

Marriott will have competition — not just from local hotels but increasingly from big-name global brands such as Hilton Worldwide, which is also investing more in Africa. Hilton has around 40 hotels in Africa with plans to double its footprint there in the next few years.

Airbnb, a global online marketplace and home-stay network, lets people list or rent short-term lodging in their homes. It’s another company dedicated to growing its presence in Africa.

Who is Marriott competing with in Africa?

While impressive, Hilton and Airbnb’s inroads in Africa are still less significant than Marriott’s, said Seth McNew in a Motley Fool column. McNew owns shares of Marriott International.

There is plenty of information available online about Airbnb’s growth in South Africa, but not about its progress throughout the rest of the continent.

We know that Airbnb has 25,000 Airbnb listings in South Africa, according to Nicola d’Elia, managing director for Airbnb Africa and Middle East, in a CNBCAfrica report.

Cape Town has 13,000 listings, Johannesburg has over 3,000, and Durban and Knysna have over 1,000 Airbnb homes listed, with Durban increasing over 500 percent.

South Africa is one of Airbnb’s largest African markets and one of its fastest growing with a 230-percent inbound increase and 195 percent increase in South Africans using Airbnb.

“The world of travel is changing,” d’Elia said. “The way people are travelling is changing. They’re driven more by new experiences and Airbnb is playing a role in this by making it possible to stay in homes.”

Airbnb lodgings had 67,000 guests in South Africa this winter — June, July and August — a 250 percent increase over 2015, Biz Community reported. South Africans staying in Airbnb represented almost half of all guests (47 percent). This demonstrates the growing appeal of home sharing – both for summer tourists from the Northern hemisphere as well as for domestic travelers, The company said.

Marriott has 5,500 properties worldwide after its recent Starwood acquisition, with many more properties under construction, McNew said in the Motley Fool report:

There will certainly be economic risks ahead, but 200 (African) properties is a small slice of Marriott’s total, which means that the potential risk to Marriott of this expansion not paying off is relatively small. However, the upside is large: By becoming the established hotel leader in the region, Marriott is best-suited for large gains if the travel industry around Africa continues to grow in the years to come.

Marriott opened its first property in sub-Saharan Africa in early October — the 254-room Kigali Marriott in Rwanda.

Marriott’s first signings since acquiring Starwood Hotels & Resorts included six hotel deals in Africa, Business Travel News reported. Three of the properties will be in Cape Town — the AC Hotel Cape Town Waterfront, Cape Town Marriott Hotel Foreshore and Residence Inn by Marriott Cape Town Foreshore. One will be in Mauritius — the Sheraton Mauritius St Felix Resort and Residences. The Element brand will enter Egypt with Element Cairo. Finally, a second Four Points by Sheraton will open in Nairobi, Hurlingham. The deals will add more than 1,100 rooms to Africa and bring Marriott’s portfolio in Africa to 205 hotels and 37,000 rooms.

In the most important African cities, hotel room supply hasn’t come close to meeting the growing demand, according to analysts at the firm Jones Lang LaSalle, Motley Fool reported.