Abyssinia Business Network /ABN/
Benyam was a primary driver in the restructures of the Addis Ababa Hotels Owners Association/AHA/. He serves on the board of AHA as a chairman. Studying Corporate Finance and Business Management at York University in Canada, Benyam returned to Ethiopia to head the hospitality division of Jupiter Business Group in 2006. Currently, the group manages two hotels, but it is developing numerous Coffee Retail Shops throughout the continent under the hadero brand.
Tell us about the Addis Ababa Hotel Owners Association.
Our association was established in 1997 E.C as a non-profit employers’ association under the name Ethiopian Hotel and Restaurant Employers’ Association. The Founders’ goals were to establish an association that would support the industry with high-quality service and product offerings. Due to the rapid growth in the sector over the past decade, the association felt the need to renew itself to meet the growing demand and needs of its members and the city. This’s why we reinvented and rebranded ourselves in 2012 E.C. Today, the newly rebranded Addis Ababa Hotel Owners Association (AHA), is governed by a seven-member board of directors and employs a-12-member fulltime team. Our association has 125 star rated member hotels and we represent the member hotels’ interests in Addis Ababa on various public and private platforms.
Can you provide data on the number of hotels, rooms ,and beds in Addis Ababa?
The hotel segment in Addis Ababa is growing exponentially. In the past decade, we exhibited an opening of one brand new hotel every month in Addis and expect another 100 plus hotels coming into the supply by 2025. A number of rooms are set to double to 20,000 keys by 2025 G.C from the current 10,500 as well. So evidently, we are getting quite good at growing the supply.
Are these all local developers?
Growth is coming from both local and international players. We are seeing existing local hotel owners expanding their portfolio holdings by adding new properties. But also new local investors are coming into the sector and most of the recent local and global international developments are a result of these initiatives.
“Homegrown hotels need to invest in training and development and work on empowering their team as this is the deciding factor in determining who will be the survivors of this industry going forward.”
Many argue that the number of hotels is higher and the majority don’t have business as they expect. What’s your impression of this?
We as an association are contentiously faced by this imbalance and we have been working on-demand creation for quite some time now. So supply is definitely outpacing demand and we could do a lot more to sustain and support the current disparity. As an association, our main objective is to promote Addis Ababa and Ethiopia as a destination. Thus, to this end we are currently participating in many international MICE (Meetings, Incentives, Conferences/ Conventions, Expo) exhibitions, to attract and bring in events that can cater to the rising appetite. And we believe Addis Ababa, as the ‘medina’ of the Continent, has the ability to be more competitive in the African meetings industry as a result of its increased trade and economic growth, political stability, and of course, growing infrastructure.
What about the lack of quality hotel rooms in the market? Is service standard of the local hotels up to par with the global competition?
The lack of quality had initiated the current boom and this has attracted global players to enter and leverage their respective brands. Currently, Addis Ababa has more than 30 global international hotels under development with over 5,000 numbers of keys. And these figures do not account locally-owned, independent properties under construction or in the planning. So definitely, service is improving but there is always room for improvement.
In your view, do you think global brands are a threat to local independent hotels?
Not in my view, as long as they are here to play fair game, transfer knowledge and ultimately add value to the development of our country. We can absolutely coexist and grow the pie together.
What is expected from local operators to thrive in the current market?
We need to continue to focus on service and become more strategically service oriented and guest focused than any of our competitors. I could not have stressed this more; however, we local hotels need to work on elevating our offerings and service standard immensely. Homegrown hotels need to invest on training and development and work on empowering their team as this is the deciding factor in determining who will be the survivors of this industry going forward.
How are you assisting member hotels on this?
Generally, not having a well-trained human capital in the service industry has been the Achilles heel of the Ethiopian tourism and we have been trying to address it in a short and long – term manner. We have been offering several short-term pieces of training, for various department heads and general managers to manage the gaps. However, mid to long-term strategy is the formation of a full-fledged of a hospitality academy in partnership with the local government.
“If we are truly talking about transforming our tourism, we have to have exceptional accommodations, not just here in Addis, but throughout the country.”
When do you expect the academy to be built?
The establishment of an academy of this caliber represents a significant, multi-million dollar investment. We are forging for a public-private investment partnership arrangement. The association will take a lead role by raising up to 50% of the overall investment as a show of commitment, with government matching the raised funds and allocating appropriate size plots for construction.
It is a preferred vehicle because it allows for such an initiative to be a possibility while ensuring an efficient timeline for completion. This model will also allow us to concretely respond to the country’s need for high-quality hospitality education needs. Further, the industry is now an important source of employment and has consequently been identified as one of the avenues to end poverty.
What strategies and directions do you set to push forward in the sector?
As a board member of the Tourism Board, we work with other private and public sector stakeholders in championing the Ethiopian Tourism cause. Currently, we are advocating the government to change the current incentive scheme that treats investors that are willing to invest in our destinations in the same manner. If we are truly talking about transforming our tourism, we have to have exceptional accommodations, not just here in Addis, but throughout the country. Unfortunately, the current boom, for the most part is only here in Addis and this is not helping our cause by itself. Going forward, the regional governments need to put forward an incentive scheme that is worthwhile for the investor’s effort.
Lastly, tell us a bit about your business group.
Our Hospitality group was founded a little over a decade ago with a passion and purpose to build an organic strong African brand against the backdrop of other long-existing multinational players. As part of our growth strategy, we have been exploring opportunities in the coffee sector and we have now officially launched a coffee flagship brand for the Continent. I really believe that we have a great value proposition, and it is t time that we as a private sector and a country take a leading role in commercializing coffee, not just as green coffee, but as a value-added commodity.
Why Coffee and what is the inspiration behind the brand name hadero?
Well, how much time do you have? [..laughing]Next to Oil, Coffee is the second biggest commodity in the world today and over 3 billion cups are consumed daily. As the originator of coffee and the largest exporter of green coffee in Africa, we are on the bottom of the supply chain and we at hadero aspire to change this for the better. Hadero is a small town located in Southern Ethiopia and our brand is inspired by the craftsmanship of the remarkable stallholder coffee cultivators of the region.