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Horwath HTL hosted a panel on understanding how operators have successfully entered the African Market by partnering with local equity partners. Philippe Doizelet, Managing Director of Horwath HTL France and a Partner in Horwath HTL Morocco hosted the panel and was joined by Christian Karaoglanian, Chief Development Officer (CDO) at Accor, Fouad Chraibi, Chairman of the Executive Board of H Partners, Rachid Alami Sounni, CEO of ALHIF Management and Jean Marc Grosfort, MEA CDO from Marriott International. The discussion was part of the Inaugural Hotel Investment Conference Africa (HICA) and the discussion focused on how operators have successfully entered Africa by partnering with equity and what the role of the operators is in structuring a transaction from a debt and equity perspective.
The conclusions reached were that even though from a tourism growth perspective, Africa is one of the fastest growing region in the world, the appetite for risk in hotel assets was still soft and the Global Financial Crisis had the effect of moving the operator and investor closer together as in many instances the ability to secure financing was dependent on having a strong brand already in place. Many companies are seeing a joint venture structure as the right win/win arrangement that suits the needs of both partners locally.
Philippe Doizelet said "Beyond the Global Financial Crisis affecting the worlds economy, Africa is developing at a fast pace. Over the past decade, International arrivals to the continent have followed a solid growth of over 6% during the past decade. However, the maturity of African growth is very uneven and seizing opportunities requires well-adapted models. The most successful seems to be a joint venture structure with both sides taking a share of the risk in order to give banks comfort to provide financing. This arrangement can be considered the ‘African’ model at the moment as both sides need the other to get developments financed and off the ground".
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
