Transcorp plans to invest around $110 million to expand its hotel network in Africa’s biggest economy as it seeks to tap into a growing market for business travellers, its chief executive said on Saturday.
New hotels are springing up across Africa, despite bureaucratic delays and poor infrastructure, to take advantage of an increasing number of tourists and business travellers, serving a growing middle class.
Obinna Ufudo told Reuters the hotel, which will be managed by the Hilton group, will house 100 rooms and located in an upmarket district of Ikoyi in the commercial capital Lagos.
“We have concluded all designs … what we are waiting for is the approval from the state building authority to commence construction,” Ufudo said. He said he expected the project to be completed in 36 months.
Industry executives say that as consumer spending stalls in developed markets, more multinationals are betting Africa’s growth will eventually translate into meaningful revenue if they can negotiate the considerable regulatory and infrastructure challenges of doing business there.
Transcorp has one hotel already managed by Hilton in Abuja, Nigeria’s capital city.
Shares in Transcorp gained 33 percent this year, after rising 314 percent in 2013.
Ufudo said the conglomerate, which also has interest in power, oil and gas, would invest $90 million to upgrade the generation capacity of its power plant to 715 megawatts from 463 megawatts.
Transcorp was one of several firms to win bids last year to buy government power assets sold as part of a privatisation meant to end decades of blackout in Africa’s most populous nation.