OBG talks to Pierre-Frédéric Roulot, President & CEO, Louvre Hotels Group

Interview: Pierre-Frédéric Roulot

What sorts of risks do you think apply as an operator making expansions in Africa?

PIERRE-FREDERIC ROULOT: It is true to say that Africa remains relatively undersupplied in terms of hotel rooms, which has prompted a large influx of new facilities and operators. But despite these opportunities, there are a number of risks affecting operations in Africa, especially with regards to the political and economic environment. Corruption is particularly rife in the region, requiring operators to act with certain vigilance and caution. Socially, there are a number of sanitary and health care concerns, which heighten the importance of creating a safe environment for our employees and guests. In order to ensure high quality services, there is also a need to provide targeted professional training for locally-employed staff and improve the level of customer service.

What is your general outlook for the development of the hotel industry in sub-Saharan Africa?

ROULOT: Africa is the world’s fastest growing continent and direct investment has increased from $15bn in 2000 to $46bn in 2012. Hotels in Africa enjoy a relatively high level of average daily rate and revenue per available room. Louvre Hotels Group expects to maintain current trends, as our target guests are predominantly business clients who are willing to pay a premium price in exchange for the peace of mind and quality level that comes with an international brand.

To what extent has global economic uncertainty impacted hotel investment in emerging markets?

ROULOT: The global consensus is that financial uncertainty has encouraged investors to investigate beyond Europe. This has had a positive effect on regions such as Africa and the Middle East. Certain categories in these markets have low supply and at the same time, the current standards do not satisfy international guests. There is not a high level of concern towards the oversupply of rooms in these regions and also there is ample room for potential, such as within the economic and midscale markets in North Africa. In countries such as Algeria, foreign hotel operators are only now beginning to dramatically expand their footprint outside of the commercial centres. One interesting objective would be to firstly have a presence in the capital cities of these regions with further expansion to follow. Another tactic of expanding in largely untested emerging markets could be to acquire distressed assets or build new facilities.

How can hotel operators improve the quantity and quality of skilled labour?

ROULOT: While hospitality skills are continuing to develop worldwide, much can still be done in terms of training to address the prevailing conditions we see in emerging markets. The hotel industry can choose to either work directly, or in partnership with private or public players, to develop these specific requirements (e.g. training, and exchange programmes) and ensure quality of services.

What can be done to prolong hotel stays and encourage more spending per visitor?

ROULOT: A large portion of travel in African markets – at least, outside the larger markets like Egypt, Morocco and South Africa – tends to be business travellers. Investors could provide facilities to boost MICE activities in their hotels – by offering large conference and meeting rooms, restaurants and entertaining areas for example. Developing services such as spas, and providing in ‘wellness offerings ’ like organic foods in restaurants, would also help diversify the customer base and boost their length of stay. There may be opportunities to organise conferences, fairs and forums in the city which could privilege the hotel and boost overall revenues. Finally, making investment in the development of commercial airline routes could prove quite fruitful for the hospitality industry in the long term, providing lower cost air travel within Africa.