Starting with a single hotel in the Malian capital of Bamako, Mossadeck Bally has built a chain of eight business hotels in five West African countries, bringing thousands of jobs and millions of dollars in economic activity to areas that need both. Environmental and social standards have helped his company, Azalaï Hotels, thrive in challenging markets.
Growing up in West Africa as the son and grandson of Malian traders, Mossadeck Bally spent every spare moment learning his family’s import-export business. “Entrepreneurship was in my DNA,” he says. He just never imagined a career in the hospitality sector.
But in 1994, following a period of political upheaval in Mali, he saw the opportunity to purchase the state-owned Grand Hotel in central Bamako. He knew that establishing a comfortable environment for business travelers—especially foreign investors—could have a lasting impact on his country’s post-conflict growth and prosperity. With $1 million in financing from IFC to refurbish the hotel to adhere to the highest international standards, and a second $1.68 million loan from IFC a few years later, he built the Azalaï Grand Hotel.
Since then, Bally has expanded the Azalaï Hotels Group, a chain of eight business hotels spread across five countries in West Africa. The business has created 2,000 jobs, a number that is expected to double by 2023, when additional hotels open. Bally has also developed programs to train African workers for the hospitality industry and encourage them not to emigrate. Thanks to a new partnership, certificates will soon be issued by the École Hôtelière de Lausanne, widely considered the top hospitality-management program in the world. This will open up more opportunities for graduates.
Azalaï hotels adhere to IFC’s environmental, social, and governance (ESG) standards, helping to lower energy consumption, improve food quality, and work with local suppliers. Despite Bally’s initial hesitation over ESG requirements, he’s seen the benefits to the bottom line. Here, he shares with IFC PERSPECTIVES his views on how adhering to high international standards leads to long-term success—and why establishing a new sector in a fragile country demands patience and resilience.
IFC PERSPECTIVES: Among all the challenges you faced building your first hotel, what was the most daunting task?
Mossadeck Bally: Finding financing. Remember, I was someone with no hospitality background, and I was looking for financing in a country recovering from conflict. Had I gone to a big international bank, I wouldn’t have gotten the loan I got from IFC. IFC saw a big potential for Mali, which had emerged from a coup d’état with a well‑run democratic election. IFC believed in my entrepreneurial skills, saw my managerial capacity, and helped us refurbish the hotel. IFC was instrumental in helping the Azalaï Hotels Group grow up.
Staffing and HR was another very significant challenge. We could not find local people who were trained to work in this industry. A project called AMSCO, which IFC ran with the United Nations Development Programme, helped us get professional managers, including our first General Manager.
“IFC believed in my entrepreneurial skills, saw my managerial capacity, and helped us refurbish the hotel. IFC was instrumental in helping the Azalaï Hotels Group grow up.”
How did the problems with staffing lead Azalaï Hotels Group to create its own hotel school?
Training is key to any business. We already know that hospitality is a major development sector because it can create jobs quickly. And today in Africa, the number one problem is that we don’t have enough jobs. That’s one of the reasons people are leaving the continent. Hospitality is a priority, but there was no investment in training people. So we created our own training school in Bamako, with the aim of opening one in every city where we have a hotel. Our training budget is 2 percent of our revenues; that gets redirected to the school.
We hire young people who spend one year with us, training half the time in hospitality and learning academic subjects the other half of the time. So far, we have graduated 150 students. For the upcoming year, we’re accepting 100 students—almost double the number of each previous class size. Our business hires about 30 percent of our graduates, and 95 percent of the other graduates get jobs in hotels, restaurants, and diplomatic compounds. They stay in Africa because they have the skills employers are looking for. Now, with the certification from the École Hôtelière de Lausanne, there will be even more opportunities.
You’ve pursued high standards like this from the time you launched the business, when you first agreed to meet IFC’s conditions on ESG—such as the requirement to build water-treatment plants for your hotels. But you also acknowledge that ESG requirements can be daunting, and that you were skeptical at first that it would pay off. How has ESG helped the business grow?
IFC is the standard on ESG in the development finance world today. It’s true that ESG constraints have added complexity, but IFC has always been there to help us. That was critical. IFC has rules, we have to obey the rules, but they have helped us and they continue to help us meet these requirements.
While it took maybe 25 years, I’m convinced ESG is absolutely needed. What I always tell my staff, if they say that ESG is too complicated, costly, and time-consuming, is that in the long run, we will see benefits to our bottom line. I’m convinced that any company that is ESG-compliant will see good results on the bottom line. In our case, ESG compliance has helped us lower our energy consumption. This is critical because we are in an environment where energy is very costly—it’s one of our top budget lines. So anything we can do to lower our consumption helps the business. But to successfully comply with ESG demands, you have to have the staff, understand exactly what the requirements are, and get help. And that’s what IFC is doing for us.
Aside from the business necessity of adhering to these standards, I live in Bamako—so I have an interest in preserving the environment in which I live.
“I’m convinced that any company that is ESG-compliant will see good results on the bottom line.”
Have there been unexpected benefits of complying with ESG standards?
Yes. People know if they go to Bamako or Dakar, they can stay in hotels that meet international standards. That makes doing business on the continent much easier—which also has an impact on foreign investment.
As you say, you live in Bamako, not Washington. IFC advises you on ESG—but how would you advise IFC on ESG?
It’s important to take into account the specific situation of each region and not “copy and paste” requirements. What’s possible in Tokyo or Paris might be more complicated in Africa. Living in Africa, we have to be pragmatic and flexible. Things take time. We have to examine the costs, because sometimes it’s costly to be compliant. Sometimes it makes sense to look at the size of the companies and start small, then scale up.
Could you talk about one specific way ESG requirements have changed the way you do business?
Absolutely. Once we decide to invest in a country, the first thing we do is the ESG study. We hire a consultant referred by IFC, who knows the IFC standards and has experience. That’s the initial step and we don’t move forward until we get the results.
What’s your advice to entrepreneurs and investors who are considering operating in Africa?
When I meet young African entrepreneurs abroad, I tell them that they could have a much bigger impact back home. I tell them about my own experience. I could have stayed in the U.S. When I was considering next steps after my MBA in the States, Mali had a military regime and the economy was not thriving. It was difficult. But I made the move back to Africa, and I was quite resilient.
That’s the biggest advice I give to young Africans who want to come back—that if you want to be successful in Africa, you have to be resilient, know your long-term plans, and be patient. If you are, there are a lot of opportunities on the continent right now.
I give the same advice to foreign investors. I’ve seen it work, and that’s exactly what IFC did. It was not very easy for a development finance institution (DFI) to finance a hotel project in Mali in 1995, with someone who hadn’t been in the business. But DFIs should go where it’s not easy, and IFC did this. IFC eased doing business and helped a champion of Africa grow.
Has your initial vision for the hotel group changed over time?
At the beginning my vision was to start small: we would manage the Grand Hotel to international standards but with an African touch, with African hospitality. Once we did so well in managing the best hotel in Bamako, with guests like Warren Christopher and Madeleine Albright, we bought the land to build our second hotel. Then the idea was to have an indigenous regional African hotel chain so that when a traveler comes from Paris, Tokyo, or London, he or she finds Africa in our hotels. At that point, I started to think that maybe this could be my lifetime achievement. I devoted all my time to developing the hospitality business because it’s an industry that has a big impact on our economy. I’m quite satisfied and happy to be in an industry where I can create jobs.
“I started to think that maybe this could be my lifetime achievement. I devoted all my time to developing the hospitality business because it’s an industry that has a big impact on our economy.”
When you reflect on almost 25 years of the business, what achievements are you most proud of?
When I look back, I see that we were pioneers. Our endeavor is to create hotels that have an impact on local economies. Our monthly payroll is close to $400,000 across the Group. This goes directly into the local economy. We pay close to $300,000 every month in taxes to local and country governments across the globe. This is the impact a small hotel chain with eight properties—soon to be 13 properties—can have.
There’s a significant indirect impact, too. In each country where we have a hotel, we buy local products. I can help a small vegetable producer sell her tomatoes at the same time I’m promoting African management and hospitality. And we outsource some things, like security and laundry, which helps other African companies succeed.So I’m proud as an entrepreneur and as an African—proud to think we can start small, continue expanding, and have such a profound impact on local economies.
Join the conversation: #IFCPerspectives
Published in October 2018