Addis is to have two more international hotel brands catering to her visitors and residents, as two globally renowned names in hospitality – Starwood Hotels & Resorts and Carlson Rezidor Hotel Group have signed management agreements with two local companies, increasing the number of current and prospective international branded hotels to 13.
Alemgenet Trade & Industry Plc brokered a deal with Starwood on December 22, 2015, for a 29-storey building which is being erected along Africa Avenue to be operated under the “Four Points by Sheraton” brand; while Sahel & Family General Trading Plc inked in an agreement with Carlson, locally known for their brand Radisson Blu, on December 24, 2015 for the formation of another brand, Park Plaza.
Starwood’s is a 120 million dollar project involving several consultants. Local companies include BAMACON Engineering, undertaking the construction work for 280 million Br; as well as JDAW Consulting Architects & Engineers, which will be paid 2.5 million Br for architectural and structural designs. JDAW had recruited another local firm, Kenemos Structural Engineering, to undertake the structural component.
“Having the experience of doing structural design for over 500 projects in the country, including the Dire Dawa stadium, we were selected by JDAW and the hotel owner for the main framework in the design,” Kenmos Tesfaye, general manager of Kenmos Engineering told Fortune.
An international firm, Dimension Engineering Consultant & CS Structural Engineering, will be paid one million dollars for supervising the work of JDAW and its sub-consultant. Another international firm, Sunshine–Hamilton Project Management (HPM), which is not related to the local Sunshine Construction Plc, will supervise the overall project. The international consultants have been brought to the project on the recommendation of Starwood Hotels & Resorts.
“Four Points by Sheraton” is one of 10 hotel brands under Starwood and the only one that specifically targets business travellers. There are 204 hotels worldwide under this brand, and the one under development in Addis Abeba will be the largest in east Africa, according to David Gorssnikalus, associate director of Starwood.
Their local counterpart, Alemegenet, which owns steel and paper factories, is located at Mekanisa Lebu Industry Zone, and will finance 30pc of the cost, 36 million dollars, on its own, while Ernst & Young will help find financing for the remaining 70pc.
The negotiation between the two took a year and half, with Ernst & Young Ethiopia, a business consultant, negotiating on behalf of Starwood.
The construction work is taking place on 3,780sqm of land around Flamingo on the Bole Road. The 29 floors of the building will have total floor space of 61,000sqm and will accommodate four restaurants and conference facilities, which will take up 2,000sqm. It will also have a fitness centre and spa, a 25m-long swimming pool and parking space that can accommodate 200 cars at once. The hotel will have 500 rooms.
“With all these features, especially the number of rooms it will have, it will be the largest hotel from all the work we have done in east Africa,” Gorssnikalus told Fortune.
Ozzie Hospitality Consulting Plc is behind the deal between Carlson and Sahel. The Consultant has three years of experience in the sector. The Carlson Group, on the other hand, has a portfolio of more than 1,370 hotels in operation and under development. Of these, Park Plaza claims 61, none of which are in Africa.
The hotel, a 16 storey building now under construction, is located on Bole Road, in front of Bole Printing Press. It is expected to be operational after one and half years, after which time, Park Plaza will take over its management for 15 to 20 years, according to a source close to the signing.
The five star “Park Plaza” will accommodate conference centres, spa centres and up to four restaurants.
Starwood’s consultants are involved in the financial aspects as well. In addition to creating the relationship between the hotel developers and brand owners, the consultant company has also played a role in reviewing the design.
“Until the end of the project, we will be consulting to generate finance,” said Zemedeneh Negatu, managing partner of Ernst & Young.
Five contractors were invited to tender for the construction project. JDAW conducted the technical evaluations, which were undertaken based on the standard given by the Ministry of Housing & Urban Development.
“BAMACON is an eminent contractor. It was not the price that made it a winner, but the work it had done before with many different buildings,” Alem told Fortune.
The company’s track record includes the construction of Kanoria Africa Textile Plc; and a number of other five-star hotel buildings, according to Girma Gelaw (Eng.), general manager of BAMACON.
Alemgenet Trade & Industry Plc was established eight years ago. Alem also had another company called Riviera International Plc, which had as its subsidiaries, a three star hotel and a PVC and plastics factory. These were sold for 140 million Br to the Metals & Engineering Corporation (MetEC).
Recently, Addis Abeba has attracted international brands with local investors developing the hotels. Among the big deals in the hospitality sector, is that between Sunshine and Hilton Worldwide for the construction of a five star hotel in Hawassa. In another instance, Nibras Hotel Plc, a local company, and Accor Hotels Group have made an expansion deal involving Marriott, upgrading the Marriott Courtyard Hotel to a five star hotel.
Addis Abeba has hosted the Africa Hotel Investment Forum for two consecutive years.