Patrick Fitzgibbon - senior vice president of development for Hilton Hotels, Africa and Europe

Hilton Hotels has big plans to expand it's presence in more African countries. TradeInvestAfrica spoke to Patrick Fitzgibbon, Hilton's senior vice president of development: Africa and Europe about opportunities enabling the expansion drive.

Hilton Hotels has confirmed it is expanding its presence in Africa. What other countries are you planning to invest in?

We’ve already got hotels in Egypt, South Africa, Algeria, Nigeria, Ethiopia, Kenya and Cameroon, many of which we’ve been in for many years.

We’ve got quite a few hotels opening, we’ll have one in Equatorial Guinea at the end of this year and one in Kampala, Uganda next year. Lagos airport and the Cape Verde islands open in 2011 and we’ve got Accra in 2011/12.

We’re also actively looking at deals in Tanzania, Morocco, Mozambique and Angola. We’re pretty busy.

Hilton plans to make each hotel ‘local’. Do you work closely with local firms when developing a hotel?

The beauty of the hotel business is that whilst you can have a global brand, you also have a local culture in that hotel and for us it’s about trying to replicate the things that guests want when they travel globally, the things that are important in terms of comforts, but also about recognising the local culture. Invariably we’ll use local people because often these hotels will be built by local investors so it will be local people developing them but also operating them.

I think one of the benefits of the hotels that we are opening in Africa over the next few years is that we are adding jobs to the markets. A considerable number of people are employed in these hotels, and 95% of the staff will always be local. A big Hilton hotel employs north of 300 people.

Given the current downturn in tourism, does Hilton have an optimistic long-term view for Africa?

Africa is such an enormous continent and 53 countries is a very wide and beautiful market in the sense that there are different opportunities at different times. What we want to do is remain flexible and innovative but also take note of when it’s the right time to enter markets.

There are markets, like Mozambique, which is currently very focused on growing its tourism business. And when you see government focused on it, it’s a good time to be focused. Uganda is also very focused around growth in hotels. So it’s very much taking low hanging fruit and seeing where there is an opportunity.

Optimistically Africa, I think as Livingstone described Uganda, is a hidden gem in many respects, there’s a lot of opportunity.

Are there pockets of opportunity in the African tourism market – perhaps East Africa or Southern Africa?

Yes there are. Tanzania has developed its tourism market very aggressively in recent years, in fact East Africa in general has. Uganda has worked hard, Kenya has had its fair share of turmoil but again is stabilising from a tourism perspective, while South Africa offers a huge opportunity.

In the same way that Sydney benefited so much from the Olympics, I think South Africa is benefiting from the higher profile on things like the IPL, the Lions Tour, the Confederations Cup and the World Cup next year, it’s all conspiring to help grow and present tourism to a much, much wider audience.

Is Hilton planning to capitalise on the growing business tourism sector in Africa?

There are obviously great drivers of travel. I think when you can say pure business and pure leisure, but also business tourism, there is huge growth. Admittedly the airline industry is having a tough time at the moment, but that will resolve itself, and the reason it will is because there is demand.

One of the other opportunities for us is not just business tourism, but regional and local travel. In a lot of cases, particularly if you can add economy and mid-market hotels as well as upscale hotels, there’s a real opportunity for local business, its not just about international tourists.

Would you capture the business tourism sector through your Garden Inns brand?

Absolutely; we see big growth in Africa for Garden Inns. There’s also another brand that we’re presenting, Doubletree by Hilton, which is still an upscale brand but is more focused on converting existing hotels, and those are two of the brands, in addition to Hilton, that I see significant growth for in Africa.

How do African markets compare with each other on cost?

In terms of what guests pay for in a hotel, it’s very much market by market, because what you’re always looking to do is give guests value for money based on what they’re buying, so the markets do vary.

In terms of development costs, they vary globally, and markets go through cycles at different times, depending on the investment plan, labour costs, whether there’s expertise in-country or you have to bring it in. So it does vary, and it varies at different times.

Our analysis today is that the business climate is such that there is so much demand for tourism and hotel-based business, that actually in most countries it’s a positive investment but there are always matrics across different markets and cost variants.

Are logistics one of the biggest problems in hotel development in Africa?

I think logistics are a problem everywhere. Logistics in Northern Europe are a challenge too, in terms of how you get stuff to be in the right place at the right time.

One of the benefits we’ve found is that working with local partners, they have a good local infrastructure and good local knowledge. Ultimately that’s a strength that they bring to bear.

We’re not coming into markets without the relevant experience on the team because ultimately the investor has a local team. It’s all about how you surround yourself with the best local team.