Interview: Frits van Paasschen
What factors have driven North African growth?
FRITS VAN PAASSCHEN: Africa is home to many of the world’s fastest-growing economies, and there could not be a better time to expand capacity here. With increasing stability, vastly improving infrastructure, rapid economic growth and a booming mobile industry, this is Africa’s shining moment.
As a region filled with emerging markets, North Africa offers several exciting opportunities for business growth, and the sector is increasing development resources to find the right opportunities. For instance, we have a large pipeline of future hotel development consisting of both new builds and conversion opportunities in the region. While each project is certainly different and offers a unique set of challenges, Algeria nonetheless offers an attractive and stable environment for businesses in the hospitality sector. As a result, we are working to continue to expand our footprint in the country, with a new Four Points by Sheraton in Oran in 2014 and the Sheraton Annaba Hotel in 2015.
How much of an impact has slow growth in Europe had on tourism activity in North Africa?
VAN PAASSCHEN: We do not see a significant impact from the weakened eurozone on our business in North African markets. We are seeing an impact in terms of travel to Egypt as a result of the current political climate there, but we take a long-term view on hotel development – particularly because many of our agreements for hotels extend 20 years or more into the future. Furthermore, while Egypt is currently suffering from the political situation in the country, there are projections that tourism will start to pick up again later in 2014. The same holds true for Tunisia, where travel to the country’s primary tourism destinations is once more increasing steadily. Algeria and Morocco have been very stable during the last few years, and the volume of business travel to these destinations continues to increase.
What are the biggest challenges you are faced with when building new facilities?
VAN PAASSCHEN: We have a very positive outlook on Africa’s markets, as I have mentioned, given that they collectively hold quite a lot of potential. This is partly due to the fact that there are a limited number of global hotel chains in the region when compared to other destinations.
To minimise risk in our operations there, we have been transitioning to an asset-light model where we work with local owners and developers to bring our hotel brands to markets. We believe real estate to be a fundamentally local business and so prefer to look for the right partners, with the right properties, and in the right locations, to bring our brands to the market. In fact, today we only own around 5% of the hotels in our global portfolio.
How big a challenge is it to find qualified and skilled labour in Algeria’s hospitality sector?
VAN PAASSCHEN: Finding the necessary human resources in some markets – even fast-growing economies – can be a significant challenge for hotel managers, and operators large and small. As a result, we believe in on-the-job support and assistance.
In light of our growing presence in Algeria, we are committed – and have been committed – to recruiting and training our Algerian associates, and as part of that we also work to bring additional international expertise to the market to encourage knowledge transfer. Furthermore, we believe it is important for tourism operators to have extensive training programmes in place, so we offer initiatives that range from on-the-job training to third-party sessions. Our locally hired associates are also often sent to sister properties where discipline-specific courses are held, so they can be exposed to different environments.
In addition, the company provides access to online courses that relate to different topics, in order to ensure continued professional development.
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