Difficulties in obtaining financing is not stopping domestic African hotel firm Roots International, which is leveraging its local and regional knowledge, ability in construction and architecture, and an intrinsic understanding of what guests require in value, offerings and style.
ACCRA, Ghana—Domestic hotel companies are emerging and prospering in Africa, as evidenced by Ghanaian firm Roots International.
Hussein Fakhry, CEO of Roots International, said the company started in 2003 as architectural, with divisions in design and construction, and the move to owning and operating hotels was an obvious next step.
The hotel company’s development strategy now is in line with trends in various parts of Africa for boutique hotels, serving a growing middle class looking for entertainment options and sophistication of owners and operators.
Roots International’s latest foray is the boutique 43-room Urbano Hotel in Ghana’s capital Accra, but it also has two serviced apartment-style properties under the Roots Hotel Apartment brand in Accra and one in Abidjan, Côte d’Ivoire, which opened in May.
Additional boutique properties, likely to be under the Urbano brand, also are in development in Ghana and Ivory Coast.
Fakhry said Roots’ properties cater to both short- and long-term stays, with the Accra property having 42 rooms.
“Forty to 50 rooms is where we are comfortable. The Urbano Hotel is boutique in style and on Oxford Street in the center of Accra. It has a restaurant where locals want to be,” he said.
“Our main business, though, is the rooms. Everything else is to support that experience and add value.”
Roots also owns the 38-room Peduase Valley Resort, approximately 20 miles north of Accra.
“Roots International designed and constructed Peduase, as well as managed operations for the first year,” Fakhry said.
“That resort has been designed with a phase two. We’ll take the management of that for one year, all the recruitment, training, branding and set-up, and then it will be given back to the owners. There is no capital investment from us,” he said.
Urbano is the brand most likely to see scale, Fakhry said. “I think there is possibility for a hotel in every main city in Ghana,” he said.
He said scale requires the right partners and financing, which he said is not so easy to obtain.
“Personally I have not been lucky or able to get financing, so all our work is from private equity contributions. If we were able to get good financing, then there would be more scale,” he said.
His company’s strategy is not to do big projects, he said.
“My philosophy is that two or three small projects is better for me than one large one. Obviously, there is less risk, and we have the ability to manage and manage our costs, despite fixed costs being higher per room with fewer rooms,” he said, noting that currently bookings are 50% direct and 50% from online travel agencies.
Roots’ guests come from various source markets—including Côte d’Ivoire, Nigeria and Togo—and both the leisure and business segments, he said.
He said the Ghana government, in general, is supportive of initiatives to boost tourism to the country. “You can see there is more effort, and I am looking at something that is more sustainable than oil,” he said, adding that “Ghana has a big advantage in terms of stability and security.”
As one such initiative, Ghana Minister of Tourism, Arts and Culture Catherine Afeku announced 2019 as the “Year of Return.”
“Ghana is one of the most important countries in relation to the history of slavery, and the initiative is facilitating and inviting the diaspora to return,” Fakhry said. “Every two or three weeks, we have in our hotels groups from the U.S. or Europe who are African-America or African-European. This is a big trend.”
Domestic hotel firms in Ghana are facing growing competition from international brands.
“Accra is becoming very competitive. Kempinski and Mövenpick are here, and I heard Radisson is coming. Also there are brands created locally,” Fakhry said.
“I can see today it is harder to get occupancy and good (average daily rate). What is needed is more work, more focus, more quality and more control,” he added.
One Ghanaian city Fakhry is looking at for all his brands is Tamale, in the north of the country and not far from the neighboring country of Burkina Faso.
“Its main source of income is agriculture, but it is close to a nature reserve, has a pleasant savannah landscape and is one hour by air from Accra. It has opportunity,” he said.
Having a background in architecture and construction is a huge positive, he said.
“I know the terrain very well. I understand the culture, what can be done, what can or cannot be accepted and what gives values. The technical knowhow you can get, or import, but the understanding is different,” he said.
One challenge is to market a city such as Accra, as it increasingly becomes urbanized, in the right way to guests, he said.