Marriott International has finalised its 2.02 billion rand ($191m) acquisition of South Africa-based Protea Hospitality Group, scaling the number of its business in Middle East and Africa (MEA) to more than 160 hotels and 23,000 rooms while positioning it as the largest hotel company in Africa.
Marriott, which now operates and franchises over 4,000 hotels in 79 countries, first announced its plan to acquire Protea Hotels late last year.
The US-company has more than 65 new hotels and 14,300 rooms in the pipeline. Last year, it opened 26,000 new rooms in a record totalling 387 hotel deals. Marriott hopes that more investment will be made along this line till 2015.
“With the addition of Protea’s regional knowledge, expertise and infrastructure, we are incredibly well-positioned to continue growing in one of the fastest expanding economic markets in the world,” said Alex Kyriakidis, President and Managing director of Marriott International in the MEA.
As part of the agreement, Protea, which has a total of 116 properties and 10,148 rooms across three brands (Protea Hotel Fire & Ice, African Pride Hotels and Protea Hotels) in seven African countries will retain ownership of the hotels it currently owns and enter into long-term management and lease agreements with Marriott for these hotels.
As a result of this, Marriott will now manage approximately 45 per cent of Protea’s rooms, franchising approximately 39 per cent of the rooms, and leases approximately 16 percent of the rooms.
Marriott International’s president and CEO, Arne Sorenson, said the hotelier “looks forward to integrating the superb Protea team into the Marriott International family, and together, to work toward new opportunities for growth and advancement throughout South Africa and the continent.”
The Protea portfolio will be fully integrated into Marriott booking portfolio by the end of May, this year.
Marriott however said it does not expect the Protea acquisition to have a material effect on its 2014 earnings.