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Lonrho Hotels: Driving Economic Growth in Africa

Lonrho Hotels is a hotel company that is aligned with the growth of Africa, contributing to sustainable destinations and providing quality accommodation for international business travelers. It offers investment opportunities and aims to generate annual earnings of $40+mn from 2019.

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Lonrho Hotels: Driving Economic Growth in Africa

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  1. Lonrho Hotels Aligned with the Growth of Africa Ewan Cameron CEO, Lonrho Hotels

  2. Hotels are a real contributor to economic growth; both enabling economies to grow and a means by which domestic product is converted into employment, consumption and cash returns. In both developed and emerging towns and cities hotels contribute to the establishment of sustainable destinations; their function enhances other business activities. People transacting business take confidence from their being a branded hotel, in addition to enjoying the hotel’s amenities, when its near their place of business. LH is a vehicle for investing and generating returns from Africa’s growth; its brands are tooled ready to grow to stabilised annual earnings of $40+mn from 2019. Since 1953 when passenger jets began to regularly transport people to such remote destinations as Nairobi, Kinshasa, Lusaka, Victoria Falls and Johannesburg the international business traveller has demanded and is willing to pay for quality hotel accommodation wherever they wish to transact business. Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  3. Lonrho Hotels is a hotel company that trades in Africa’s high growth cities, trading brands that are as dependent on international business travellers as local trades and business people; Lansmore, luxury hotel brand designed by business travellers for business travellers. Base camp for doing business easyHotels are for the many, not the privileged few. Great sleep in a great place. African origin coffees and teas complemented by a popular local food menu Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  4. Shape, size and structure of the Hotel industry • 13,443,014 is the total recorded inventory of branded hotel bedrooms globally. Supply increased by more than 2.3mn bedrooms since 2000 (Smith Travel Research (STR) July 2012). • Middle East & Africa region has experienced a 2.5% compound annual growth in branded hotel bedrooms since 2000 • Hotel industry has undergone two major revolution that can be dated back to InterContinental’s acquisition of Posthouse Forte in 2001 1) branding and 2) separation of ownership from the operations. • On a global scale, hotels operated under a management agreement are prevailing and increasingly replacing owner-operated hotels and other contract structures such as lease agreements. However, in some regions (e.g. Europe), the lease agreement is still the predominant business model and its replacement by the management agreement is proceeding at a slower pace. • A significant share of hotel investment in Europe is undertaken by institutional investors such as real estate funds, pension funds or insurance companies. These investors often require (either by law or their articles of incorporation) income from rent and lease. Due to this fact, these investors can only enter lease agreements, not management agreements (which would generate income from trade and business). • Lenders in Europe are conservative, which causes banks to have a preference of lease agreements; where the lessee bears the full operational risk and the lessor receives a steady cash flow to cover the amortisation of debt. ME&A has 5% of the world’s branded hotel supply Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  5. Size of Africa’s hotel market 1% 1% or only 0.17mn of the 13.5mn branded global hotel bedrooms are today in Africa Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  6. Data from the Economic Survey 2013 shows the number of business travel arrivals increased by 1.7 per cent to 236,000 in 2012 from 232,100 in 2011, unlike tourist arrivals which fell by 7.6 per cent to 1.22 million from 1.32 million over the same period Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  7. Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  8. Investment driving growth Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  9. Huge market = East Africa Community $98billion GDP 145mn people Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  10. Doha Yaoundé Blantyre Kilimanjaro Luxembourg Zurich Harare Zanzibar Cairo Juba Entebbe Djibouti Johannesburg Lilongwe Hong Kong Ndola Abu Dhabi Istanbul Gaborone Pemba Lubumbashi Maputo Dubai Kinshasa Accra Bujumbura Paris Mombasa Lagos Amsterdam Luanda Dar es Salaam London Addis Ababa Lusaka Bangkok Khartoum Kigali Mumbai Amsterdam Malinda Guangzhou Abidjan Livingstone Bamako Nairobi = the hub of Africa = 45 daily connections Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  11. Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  12. Nairobi sustains one of the highest rates.. YTD 2013 ADR, USD Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  13. STR data OCT YTD Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  14. STR data OCT YTD Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

  15. Apply the principles of economics and allow your organisation to; gain leverage from local know-how, be customer focus and respond quickly to market forces Establishing a business in Kenya has been the right decision for many who’ve come before Kenya is the largest EAC economy. Achieve a Kenya success story will enable your business to grow into Rwanda, Uganda, Tanzania and Burundi, and then throughout Africa’s high growth destinations. Most business strategists would support this approach to growth. Kenya Investment Forum 3rd Dec 2013, Ewan Cameron, Lonrho Hotels

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