AFRICA: Hotel Development On The Rise

The number of planned hotel rooms for 2016 in Africa has soared to 64,000 in 365 hotels, up almost 30% on the previous year, according to new figures from the annual W Hospitality Group Hotel Chain Development Pipeline Survey.

The increase is largely down to strong growth in sub-Saharan Africa, which is up 42.1% on 2015 and is significantly outstripping North Africa which achieved only a modest 7.5% pipeline increase this year.

A major shake-up in the rankings by country saw Angola, never before listed among the top 10, push Egypt out of second place, due to a major deal signed by AccorHotels in Angola.

The W Hospitality Group survey is published ahead of the Africa Hotel Investment Forum (AHIF), which is organized by Bench Events. The conference attracts all the major international hotel investors in Africa and is being held for the first time in Lomé, Togo on 21-22 June. A second AHIF will take place in Kigali, Rwanda on 4-6 October.

Trevor Ward, W Hospitality Group Managing Director, said: “The evidence from our survey is clear – investors remain confident about the future of the hospitality industry on the continent … Africa remains resilient.”

The IMF forecasts that economic growth in sub-Saharan Africa will increase by 4% this year and 4.7% in 2017, up from 3.5% in 2015. These forecasts are down from the 5-6% increase enjoyed over the past decade. However, Africa’s regional growth forecasts are way ahead those of mature economies, such as Europe, the USA and Japan.

Matthew Weihs, Managing Director of Bench Events, said: “Africa is still on the up. For business, trade and capital investment, the continent remains an attractive proposition, leading to continuing demand for accommodation and other hospitality services.”

The latest W Hospitality Group Hotel Chain Development Pipeline Survey is the eighth annual pipeline survey, widely recognized as the most authoritative source on hotel industry growth in Africa, particularly on revealing data on international chains signing new deals across the continent.

The 2016 survey provides a full picture of hotel development across the continent – 36 hotel chains and 86 brands with more than 64,000 rooms in 365 hotels.

In comparison to figures from the inaugural survey in 2009, it is clear that hotel development in Africa is making rapid advancements. In 2009, there were 19 international and regional hotel chains contributing, with a pipeline of 144 hotels and just under 30,000 rooms.

In the latest pipeline survey report, Nigeria and Angola dominate. In July last year, AccorHotels signed with AAA Activos LDA for the management of 50 hotels in Angola with around 6,200 rooms.

Across the continent, the north-south divide on hotel development continues. In 2011, the number of pipeline rooms in the five countries of North Africa was about 25 per cent higher than that in sub-Saharan Africa. Today, the number of pipeline rooms in North Africa is less than half the number in Sub-Saharan Africa.

Trevor Ward explained: “There are two reasons why development activity in North Africa is now somewhat subdued. Firstly, the markets there are more mature and have already seen much development, so there are fewer opportunities for new hotels. Secondly, there is the political turmoil – in Libya, which has seen a 40% drop in the pipeline, and also Egypt, parts of which are experiencing drastic reductions in the number of tourists.”

Nigeria remains the country with the most rooms in the pipeline, up 20% on 2015. Nigeria and Angola account for 17,782 rooms between them, almost 30% of the total pipeline.

Trevor Ward added: “If all those involved – the investors, chains, consultants and lenders – can bring these deals to fruition, the pipeline of the future will result in the much-needed expansion of Africa’s hotel industry.”

The 2016 survey will be discussed in detail at AHIF in Lomé in June. Matthew Weihs, said: “The 30% increase in the hotel development pipeline is astonishing and clearly demonstrates that Africa still has fantastic potential for further growth.”