Marriott International gains foothold in South Africa with new hotel brands

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Marriott International (NASDAQ: MAR) plans to built three hotels in Cape Town and two already in construction in Johannesburg — in partnership with Amdec Group. Marriott International (NASDAQ: MAR) plans to built three hotels in Cape Town and two already in construction in Johannesburg — in partnership with Amdec Group.

NASDAQ-listed Marriott International today announced plans to built three hotels in Cape Town and two already in construction in Johannesburg — in partnership with Amdec Group.

After the 2010 World Cup there were too many hotel rooms and it took about four years for the oversupply to be absorbed.

But in the past two years trading has been positive because of tourist influx in the country. And this has provided opportunities for International Hotel groups flock to SA.

According to the World Travel and Tourism Council, the direct contribution of travel and tourism to GDP in SA was R113.4bn in 2014 (3% of GDP). The contribution is expected to grow 4.6% per annum to R184.7bn (3.4% of GDP) by 2025, reflecting the economic activity generated by industries such as hotels and airlines.

Marriott, which last month won the final clearance to buy rival Starwood Hotels and Resorts Worldwide Inc, said it will bring the first Marriott Hotel brand in Cape Town and Residence Inn by Marriott, which will be first in the country.

Thirdly, AC Hotels by Marriott, will also be the first hotel for the Middle East & Africa (MEA) region.

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The three planned developments will add over 500 rooms to Cape Town’s hotel accommodation offering.

Bringing 189 additional rooms, the AC Hotel Waterfront will be located at The Yacht Club in the Roggebaai precinct, the gateway to Cape Town’s waterfront.

Harbour Arch, currently the location of several major construction projects, will be the site of the 200-room Marriott Hotel Foreshore and the 150-room Residence Inn by Marriott will located at the Foreshore area.

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This announcement follows Marriott’s existing partnership with Amdec, to develop the first two Marriott hotels in Johannesburg's upmarket Melrose Arch, which are scheduled to open in 2018.

Amdec’s total investment in Cape Town and Johannesburg developments, amounts to over R3 billion, which will have positive economic spinoffs and impact on job creation.

Marriott, the owner of upmarket hotel chains such the Ritz Carlton and Sheraton already runs one of Africa’s biggest hotel brands, Protea Hospitality Group, which it acquired in 2014.

"Africa is particularly important to Marriott International's expansion strategy because of the continent's rapid economic growth, expanding middle class and youth population," Marriott chief executive Arne Sorenson said in statement.

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“With over 850 million people in sub-Saharan Africa alone, there are enormous opportunities," said Sorenson.

The Hotel group aims to expand its current presence in Africa to 27 countries, with over 200 hotels and around 37,000 rooms.

Marriott Middle East and Africa MD, Alex Kyriakidis says the the developments in both cities confirm the country’s importance to the international travel market – for both the business and leisure traveler. 

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James Wilson, CEO of Amdec, says the group is thrilled to partner with Marriott in SA where the new hotels will become landmarks in the country and appeal to travellers from all over the world.

The five hotels are expected to create 8,000 building-related jobs while under construction and over 700 long-term hospitality jobs, Marriott said.

Read more on:

Cape Town Property Market  |  Hotels and Leisure  |  Protea Hospitality Group  |  Melrose Arch  |  James Wilson  |  Amdec  |  Arne Sorenson  |  Marriott International  |  Alex Kyriakidis  |  The Yacht Club  |  Marriott Hotel Cape Town  |  Starwood Hotels and Resorts Worldwide Inc  |  Ritz-Carlton Hotel Company
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