US hotel giant Marriott takes over Protea hotel group

By John Odyek

US hotel giant Marriott have finalized a deal to buy the Protea group, one of Africa's largest hotel chain for US$186m (sh461b). An official at Kampala Protea Hotel confirmed the take-over bid.

Based in South Africa, Protea manages 116 hotels in eight African countries namely Uganda, South Africa, Zambia, Nigeria, Namibia, Malawi and Tanzania.

In Uganda the company manages three properties, including the Kampala Protea Hotel, located in Kololo, Kampala; the Entebbe Protea Hotel, adjacent to Entebbe International Airport and the Mbale Protea Hotel, near Mt Elgon, located in Mbale district.

A fourth property, the Hoima Protea Hotel is currently under development in the Western Ugandan town of Hoima, in the oil-rich Albertine Graben.

Kampala Protea Hotel is owned by Patrick Bitature, one of Uganda’s business moguls. It was not possible to get a comment from him as his phone kept ringing and he did not answer. It was also not possible to get a detailed comment at the hotel as the general manager was said to be in a meeting.

"Marriott and Protea plan to close the transaction on April 1, 2014," the firms said in a statement.

The US firm has undertaken to take on all of Protea's staff, who number around 15,000. The Nasdaq-listed Marriott Group has 3,900 properties around the world and is worth around US$15.5b (sh6150trillion).

The deal gives Marriott a formidable position in a rapidly growing market, nearly doubling its footprint in Africa. Last year, a record 56 million travellers visited Africa, according to UN statistics.

That was up six percent from the figure for the previous year and a similar increase is expected for 2014. Business travel is also picking up on the continent as the sub-Saharan region grows at an average of five percent a year.

After the deal was announced on Wednesday, Protea CEO Arthur Gillis said that he expected Marriott to "sprinkle professionalism" on top of an already well-functioning business.

"One cannot compare the resources of a company with 120 hotels with the resources of a company with 3,900 hotels," Gillis said.

Gillis said the deal placed Marriott at an advantage over global competitors which had decided to build African hotels themselves, rather than acquire them.

Marriott, he said, "looked at what the other global players had said they were going to do in Africa, then what the other global players have done in Africa."

"Sadly they are two entirely different things. I've got many newspaper clippings, (detailing plans for) '50 hotels in five years,' '75 hotels in ten years'", said Gillis.

"Marriott have said something completely different" in going for a takeover," he said.

Responding to suggestions that Marriott may have got Africa's most prized hotel chain at a bargain, Gillis said "Both Marriott and Protea are moderately unhappy about the price that was paid," Gillis joked.

"We have left a lot of value on the table, but that value is going to be unlocked by Marriott. It was an absolutely unanimous board decision," Gillis said.