Recognizing opportunity to grow in Africa as the market eventually recovers from the pandemic, Atlanta-based management firm Valor Hospitality Partners has agreed to a joint venture with African hotel chain CityBlue Hotels, owned by The Diar Group, Nairobi, Kenya.
The new venture will be called Valor Diar and will start by operating Divine Residences by CityBlue in Riverside, Nairobi, Kenya. The project was developed by Vaal Real Estate and is set to open in April 2023.
Moving forward, Valor Hospitality Partners Co-Founder and CEO Euan McGlashan said part of the reason behind the tie-up was Diar Group’s ongoing ability to scale CityBlue in the sub-Sahara African market over the past 10 years.
“In the past several years, both Valor and Diar have independently been working on many hotel opportunities within East Africa, both new builds and conversions, and the majority of these projects stopped or stalled due to the pandemic,” McGlashan told HOTELS on Tuesday. “As the post-COVID recovery takes hold globally, a number of these projects are now being re-energized and confirmed. The partnership announced between Valor and Diar now offers owners and developers a very strong, proven and unique solution of a regional African brand (CityBlue) and a globally respected and highly successful third-party operator (Valor). We think our collaboration offers considerable value and USP’s for our clients.”
Valor, with 80-plus hotels its international portfolio, already has a presence on the continent and a joint venture should accelerate growth for both groups via the popular CityBlue brand.
”The East Africa region has undergone significant growth of hotel demand over the past 10 years, and considerable new hotel developments have opened or are at final planning stages, clearly this was disrupted over the past two years with the pandemic,” McGlashan added. ”However, since early 2021 we see strong returning travel and hotel demand, and currently we jointly have a pipeline of around 1,000 rooms.”
Jameel Verjee, principal of The Diar Group and founder of CityBlue and a hospitality management arm Diar Hospitality added, “Valor’s visionary leadership recognizes that its global strategy must include all of Africa and not just South Africa.”
Verjee further told HOTELS that The Diar Group takes long leases of hotels and/or signs management contracts, having built up its proprietary CityBlue brand from the ground-up starting in 2013. It has also developed its own Africa-based management team to go with its four sub-brands, which include CityBlue Hotel & Suites, Urban by CityBlue, Residences by CityBlue and Lodges by CityBlue.
“With Valor, we see scope to jointly manage CityBlue and non-CityBlue properties, especially in our specialist middle and upper-middle market sector,” Verjee said. “This is especially so in the post-pandemic era, which should be a once-in-a-generation opportunity to build portfolio and create significant scale.”
While terms of the deal were not disclosed, McGlashan said the new partnership has established a strong multi-disciplined regional team at the Nairobi headquarters, which is supported by Diar’s head office team in Dubai. He said Valor also has an extensive team in Cape Town, South Africa, in addition to global support from Valor regional headquarters in the U.S., U.K. and Middle East.