When Andrew McLachlan was hired as Rezidor Hotel Group’s vice president of business development for Africa, the Brussels-based management company had eight hotels in five countries across the continent. Now, less than three years later, Rezidor has 34 hotels in 13 countries and another 18 hotels under development.

With development stalled here in the U.S. and China no longer an undiscovered country to the American hotel world, Africa has become one of the next great frontiers. “Everybody is very much aware of Africa as an emerging market with opportunities,” says McLachlan, the South African national who opened and still leads Rezidor’s office in Cape Town. “Marriott is looking, Hilton is and so is InterContinental. Everyone is having a look, flying in and out.”

Not flying in and out, he says, has been the key to Rezidor’s success: “If you’re serious about developing hotels in Africa you need to be in Africa, as opposed to doing it from the U.S., Europe or the Middle East,” McLachlan says. “Like most of the competition, we weren’t that successful when competing against local or regional brands. We made the decision to make a run at Africa and said ‘Let’s be on the ground in Africa.’”

The original goal was to have 50 hotels open by 2015, but since the early success, the goal was moved up to 2012. Rezidor is Carlson Hotels’ largest partner in Europe, the Middle East and Africa, operating its Regent, Radisson Blu, Park Inn and Country Inns & Suites brands. Under a worldwide license agreement with Italian fashion house Missoni, Rezidor also operates and develops the new lifestyle brand Hotel Missoni.

McLachlan recently chatted by phone from his office in Cape Town to discuss the opportunities, and unique challenges, in Africa.

The Radisson Blu Cape Town (South Africa)

How does being on the ground help?
We can react much faster to a lead and an opportunity. We’re fortunate to work in a flat organizational structure and can make decisions much quicker. Against larger companies, when we’re bidding on the same thing, by the time our competition has arrived, we’ve potentially done the deal. It’s much faster and we understand local challenges when it comes to getting approval much quicker.

Why is Africa so ripe for development?
Africa is an attractive market as it continues on its way up. Often when a country is developing you’re attracting people in various sectors. A hotel is early on the shopping list. If a government is attracting foreign investment, it is flying people in and you need reliable and recognizable hotels to stay in. And we see the opportunity because there aren’t too many branded hotels in Africa. Even in South Africa, with many domestic brands, we only have 12 or 13 internationally branded hotels. There is an opportunity and space for internationally recognized brands.

How different are the countries there?
There are so many different regions in Africa and they’re quite different. In North Africa, you’ve got Egypt, a sophisticated hotel market. South Africa is also comparable to any sort of European country with quality and number of hotels. But in South Africa you’ve got very good strong, local brands with the same sort of standards you’d find in Europe. But in the rest of Africa, the hotel supply is almost non-existent. Some competitors have been in Africa for the last 25 years or so, but haven’t done much in a long time.

Then you’ve got third world Africa, but it’s more politically stable then it’s ever been. Airlift is a lot easier than it was. With telecommunication and the Internet and cell phones, you can communicate there. A lot of businessmen are coming in and there are almost no hotels. The supply and demand curve is out of kilter. There is a huge opportunity to get into these capital and financial hubs and put in a really good business hotel.

Where are the hot spots for development now?
From the West African point of view, Nigeria is definitely the hottest spot. It’s got the largest population in Africa, the fifth largest natural gas reserves; it’s the largest oil-producing country in Africa and the last internationally branded hotel opened there in 1984. Since that Sheraton, a couple regional hotels have opened. Angola is also showing huge potential and there are no branded hotels there. It’s the second largest oil producer. In East Africa, Kenya and Ethiopia are important to us.

What are the political situations like in many of these countries?
At the moment, from a political unrest view, Africa is at the best place it’s been in 50 years. There are maybe only two countries not in a good state. The rest have gone to democratic elections and things are a bit easier. There are challenges in every country … a lot of red tape, there’s corruption and there will be for a long time. That’s the biggest challenge for us.

What brands are you developing there?
Our core brand is Radisson Blu. It would compete against a Hilton, Sheraton or Marriott there. It’s the brand we rely on first in a new market. Once we get a Radisson Blu up, we’d look to see if we could develop more Radisson Blus or bring in the mid-market Park Inn. If we look at Hotel Missoni, it’s competitive set would be a W, and it needs more sophisticated markets. Cape Town was logically the first place to introduce it there (in 2010) … It’s quite a trendy city.

How has the global recession affected Africa?
It’s different country to country. In third world Africa, it really hasn’t. African banks haven’t been exposed to the same degree as in the U.K. or U.S. From a development standpoint, because there was such a drastic lack of supply, hotels are still coming out of the ground as they had been. In South Africa, the banking segment has been hit, but not as hard. It is in a recession for the first time in 17 years, but not to the same degree as in Europe. People still have smiles on their faces here and there are cranes all over the place.

How about on the lending side?
There’s been a slowdown, but not a grinding halt in development. Financing has always been quite difficult here, so in good days you’d need 60 percent for debt funding with 40 percent equity—a very healthy ratio. In Europe and the States, debt to equity was a lot higher, so the bump in the road made it very hard to continue. In Africa, which has always been quite conservative, it’s now maybe 50-50, so you’re only looking for an additional 10 percent (equity). Development is still happening.

What kind of occupancy numbers have you been seeing there?
In certain countries, in Angola, where we have a Radisson Blu under development, capital city occupancy has been in excess of 90 percent on average. In Lagos, in Nigeria, we have felt the global recession and occupancy is the worst it’s been in 50 years: 76 percent.