Africa, invesment, news

Africa News November 11, 2013 at 02:29PM

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VENTURES AFRICA – Marriott International, an American hospitality company has revealed plans to buy Protea Hospitality Holdings, a Cape Town-based hotel group with franchise in seven African countries including Nigeria, Tanzania and Uganda.

A statement released by Marriott confirmed that it has signed a non-binding letter of intent to negotiate exclusively with Protea, adding that the buy-out will boost its African business.

“The development cycle for opening new hotels in Africa is typically long due to the challenges posed by emerging infrastructure, so joining forces with Protea Hotels and their highly respected management team is the strongest way to jump-start Marriott’s footprint in Africa,” said Alex Kyriakidis, President of Marriott International for the Middle East and Africa.

Although the expected value of the deal was not disclosed, a definitive agreement is expected to be signed by the end of the year.

The deal, when completed, will provide Marriott with a proven operational platform and market knowledge to accelerate its expansion plans and solidify its leadership position in the dynamic and growing African hotel market. It would also double the US-based hotel distribution in Africa to more than 23,000 rooms, making it the largest hotel company in Africa.

“With the Protea Hotels acquisition, our expanded footprint should allow us to become the first choice of Africa’s rapidly growing population of young, sophisticated travellers, and drive loyalty to our Marriott Rewards program both within Africa and globally,” added Arne Sorenson, President and Chief Executive Officer of Marriott International.

Marriott presently has more than 3,800 properties in 72 countries and territories with reported revenue exceeding $11 billion in 2012.

As part of the transaction, Protea Hospitality Holdings will create a property ownership company to retain control of the hotels it currently owns before entering into a long-term management and lease agreements with Marriott for these hotels. It would also retain a number of minority interests in other Protea managed hotels.

The purchase will offer Marriott control of approximately 46 percent of the rooms, from which 40 percent of the rooms will be franchised, with an additional 14 percent reserved for leasing purposes.

 

 

 

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