Expanding local hotel capacity

In recent years Gabon has witnessed a spate of hotel construction, renovation and changes in ownership, with much activity taking place at the upper end of the market. Major developments include the creation of a new Gabonese hotel group that has come to dominate the high-end, branded business segment in Libreville and Port-Gentil, as well as the arrival of international management companies, the planned launch of the country’s first branded mid-range establishment, and agreements to build luxury accommodation in some of the country’s national parks.

Segment Overview 

According to figures from the French Directorate-General of the Treasury’s Foreign Economic Services published in June 2013, there are around 400 hotels and other institutions offering accommodation in Gabon, with a total of 5300 hotel rooms, around half of which are in Libreville. Despite plans to develop ecotourism, more than 90% of hotel rooms are located in cities, according to older figures provided by the National Agency of National Parks (Agence Nationale des Parcs Nationaux, ANPN). National parks account for around 6% of hotel rooms in the country, according to these figures. The French Treasury puts the price of standard-quality hotel rooms close to European norms at between CFA60,000 (€90) and CFA250,000 (€375). Although no official figures are available, industry figures put local hotel occupancy rates at between 60% and 65%.

Growing Activity

The country has seen a number of new hotel openings in recent years. Several new, mostly smaller institutions were opened in Libreville in anticipation of the country’s hosting the African Cup of Nations in 2012, including the Étoile d’Or, the Onomo and the Résidence le Nomad, and new establishments have continued to open in the capital since then. These include the Royal Palm, which opened in November 2013 and which has 26 rooms, including two junior suites and a royal suite with a private swimming pool, having been built at an estimated investment cost of CFA2.8bn ($4.2m). The hotel, which has 50 employees, was established by local investors Fabienne and Jean-Marc Laissy. “We saw that there was a great deal of unsatisfied demand for high-end accommodation in Libreville,” Fabienne Laissy told OBG, explaining their decision to open a hotel there. “There is still a lot of demand and other hotels are now being opened or renovated in order to meet it,” she said, adding that she believed more such projects are likely in coming years. “More foreign hotel groups are likely to enter the market, in particular African groups like firms from South Africa.”

The opening of the Royal Palm was followed by another new institution, the Legacy Hotels and Resorts’ 46-room Le Cristal on Place de l’Independence in the capital, in February 2014. Legacy Hotels and Resorts cited factors such as growing demand spurred by Gabon’s developing infrastructure, the potential of natural resource-based industries, including timber, as well as the country’s upper-middle-income status as some of the reasons it decided to open the hotel, its 24th worldwide, in Libreville.

New Players

Major changes are also under way at existing large hotels in Gabon, with a newly established local firm, Wali Hotels and Resorts, having effectively come to dominate the branded business segment in Libreville and Port-Gentil in recent years. The group, which was founded in 2011 by local investors, acquired three of the country’s largest hotels in 2012 from the government for a total of CFA25bn (€37.5m), namely the 330-room Okoumé Palace (also known as the Laico) and the 256-room Méridien Re-Ndama in Libreville, as well as the 80-room Méridien Mandji in PortGentil. Wali has plans to refurbish all three at a cost of CFA58bn (€87m). The Okoumé Palace was previously owned for three years by the Libyan African Investment Company (Laico) before being acquired by the government in 2011. The Méridien-branded hotels were already owned by the state. The sale attracted some criticism in the local press for not having been the subject of a privatisation tender.

Following Wali’s acquisition of the hotels, the firm brought in international hotel management group Carlson Rezidor to manage the Okoumé Palace on a 20-year contract. The institution is undergoing $50m worth of renovations that will transform it into a 330-room, five-star Radisson Blu hotel, as well as see the construction of a new 140-room, three-star Park Inn by Radisson Hotel in a new separate tower on the site. Together the two hotels will contain 13 conference rooms, five restaurants and bars. The Park Inn will be the country’s first mid-range-branded hotel project and comes as observers increasingly point to a gap in the market for such hotels in Africa. The project was initially due to be completed in late 2013 but has faced a number of delays and at the time of writing it was unclear when it would be finished.

Meanwhile, the refurbishment of the Méridien Mandji in Port-Gentil is due to begin in the final quarter of 2014 and will take between 15 and 18 months to complete, at a cost of $18m. The project is part of a wider initiative announced by Starwood in early 2013 to renovate 13 hotels under its management in the Middle East and North Africa, at a cost of more than $200m. The Méridien Re-Ndama in Libreville is also one of the hotels designated for refurbishment under the initiative, but details of the plans had yet to be released at the time of press.

International Players

Carlson Rezidor’s arrival in Gabon brings a second major international hotel management group into the local market, following in the footsteps of Starwood, which manages the country’s two Méridien-branded hotels. Prior to its purchase by Laico, which owned it for three years, the Okoumé had been managed by Intercontinental Hotels Group for 35 years, while French group Accor also previously operated a Novotel in the capital; however, both groups subsequently left the market. Another international player is set to arrive in the market in the form of Marriott, which in 2012 announced plans to open a 250-room hotel in Libreville, to be followed by a 40-unit extended-stay executive apartment complex. The two facilities were originally due to open in 2014 and 2015, respectively, but construction appears to be running behind schedule.

Changing Profile

Currently the high-end hotel market in Gabon is concentrated in Libreville and largely caters to business visitors and conferences rather than tourists coming to the country for the purpose of leisure, but industry figures say this is set to change. “Tourism in Gabon is still mainly business tourism and the hotel market in Libreville is generally driven by business travellers and large groups,” said Laissy. “However, the government is increasingly looking at developing a post-oil economy, and the prospects for the wider development of the sector are good.” Underlining this, in 2012 and 2013 the government signed agreements with foreign firms Aman Resorts and Sustainable Forestry Management Africa for the establishment of luxury accommodation in the country’s national parks, with the authorities hoping for more such deals in the future.

Workforce Issues

Challenges for investors in the accommodation segment include recruiting qualified and well-trained staff. “Unfortunately, there are not many hotel training facilities in Gabon and as a result there is a lack of a trained hotel workforce,” said Laissy. “We started recruiting a year before the hotel opened in order to train up our workforce. The government is working on launching training schools, but it will be several years before the impact is actually felt.” However, Laissy added that a positive feature of the sector was that there are few problems as regards retaining staff. As a result of such issues as well as a lack of appreciation for the opportunities on offer in the sector, hotel management is currently dominated by foreigners, Albert Engonga-Bikoro, former director-general of Gabon Tour, told OBG. However, this may change gradually. “It will take time for locals to understand that hotels and tourism in general are a potentially lucrative industry; there is a need for the concept to enter the local mentality,” he said.