Ethiopia’s return to peace and economic prosperity is heralding a new era in the country’s development, with scores of businesses planning new projects there, including well-known South African hospitality brand BON Hotels.
After decades of being plagued by famine and civil war, Ethiopia’s success story has attracted international attention. Recently its president, Abiy Ahmed, was named the recipient of the Nobel Peace Award for his work in ending the conflict with neighbouring Eritrea. And investors have been encouraged by the country’s steady economic growth, fuelling hopes that it will revitalise the entire Horn of Africa region.
Rapid economic growth
According to the World Bank, Ethiopia has experienced robust growth of almost 10% a year in the ten years till 2017, compared to a regional average of 5.4%. Last year, GDP growth slowed somewhat to 7.7%, but the country’s growth is still much higher than the global average, as industry and services are booming.
Most of the growth is due to an increase in spending on infrastructure, such as the soon-to-be-completed Grand Renaissance Dam, set to be Africa’s largest dam, which will generate 15 000 GWh per year, as well as the light rail system which will create corridors from Ethiopia’s major centres to its ports. New cities are springing up along these corridors to such an extent that the UN projects urban populations in the country to triple by 2050.
Increase in investment
Ethiopia’s stellar rise is in large part thanks to its high levels of investment, currently at 38% of GDP. China is one of its biggest investors, as well as its largest trading partner, as Ethiopia continues to sell off many of its state assets through its privatisation drive. It also has an efficient national airline with a modern fleet: Ethiopian Airlines is credited for transforming the country into a hub for the entire region.
Added to this is the fact that Ethiopia has the third largest diplomatic community in the world after New York and Geneva. “Government incentives, as well as international conferences and regional bases for non-profit organisations, embassies and aid agencies, have led to an explosion in hotel growth in Addis Ababa,” says Guy Stehlik, CEO of BON Hotels. “We have another three signed hotel projects in Ethiopia opening in 2020 and are aggressively investigating other exciting opportunities not only in the country, but in nearby Eritrea too.”
Addis opens its doors to new hotel
Most of the growth in new hotels has centred around the capital, Addis Ababa. In an annual hotel pipeline survey last year, Ethiopia was singled out as having the most new hotel developments in East Africa. “It’s clear why hotels are looking to exploit opportunities in Ethiopia,” says Stehlik, whose own BON Hotel Plaza will open its doors in Addis Ababa early next year. “The country’s growth has been impressive and we are pleased to see the return to social stability and prosperity in the region.”
Speaking about BON Plaza Hotel, Stehlik says it will be the first contemporary hotel of its kind in the capital, boasting 69 rooms with conference and meeting facilities. “We wanted the hotel to have an upmarket, urban feel to it,” he explains, “yet at the same time be contemporary and timeless.”
He expects most of the visitors to the hotel to be business travellers, with a healthy blend of tourists: “Visitors will be pampered by our attentive staff who will see to all their needs, including all-day dining prepared by an international kitchen team.”
With over 5 000 rooms set to become available in 25 new hotels in Ethiopia, Stehlik is banking on his brand standing out from the crowd. “What differentiates us is that BON Hotels has a competitive advantage as an authentic African brand,” he says.
He adds that he is encouraged by Ethiopia’s huge domestic market of over 100 million people, many of whom are upwardly mobile, and the government’s intention to reduce its reliance on agriculture and focus more on hospitality and tourism. “We see ourselves as well placed to benefit from this trend,” Stehlik says. “Ethiopia is the rising star of the region and BON Hotels is pleased to be expanding into this country for the first time.”