New maturity for Africa hotel growth

Addis Ababa - Growth in the African hotel sector has reached a new level of maturity with less reliance on foreign visitors and increased demand from local businesses, according to the 2015 African Hotel Valuation Index, published to coincide with the recent Africa Hotel Investment Conference.

African hotel brands such as Azalai, City Lodge and Protea are trading well, with a number of hotel investors showing faith in the continent, according to the report.

In another report, the African Hotel Report 2015, Hotel Partners Africa identified Nigeria as presenting the biggest opportunity in West Africa, with the strongest economy on the continent matched with only 34 branded hotel bedrooms per million, population. This compares with 6 754 branded hotel bedrooms per million population in North America and 2 432 bedrooms per million in Europe.

Ghana with 59 bedrooms and Ivory Coast with 61 bedrooms also present great opportunities with very strong unrequited demand, according to the report.

A research paper by JLL, entitled Spotlight on Africa: Opportunity on the Horizon, explored the investment potential of hotels in Africa. It found it which has improved significantly over the past decade, though it is not without its challenges.

The growth drivers for the hotel sector in Africa include improving fiscal management, favourable demographics (a population of 1.1 billion), rapid urbanisation, a growing middle class, rich commodity and energy resources, considerable infrastructure investment and increased tourism, according to the research.

A difficult period in travel to Africa, caused by the outbreak of Ebola, is coming to an end, according to ForwardKeys, which monitors future travel patterns by analysing 14 million reservation transactions daily.  

At the recent Africa Hotel Investment Forum (Ahif) 2015 in Addis Ababa, ForwardKeys said the first sign of recovery was signalled by a slight growth in bookings in September, up 6.4% on the previous year. This marks a turning point, after four years of strong growth were wiped out by the Ebola outbreak, with flight suspensions from August 2014.

Bookings for the next six months suggest a sustained recovery, the company said and forecasts that sub-Saharan Africa is poised to see a recovery in its tourism trade.

At Ahif several new hotel development projects in Africa were also announced by Carlson Rezidor, Hilton, Marriott, Movenpick and Starwood.

Starwood Hotels & Resorts Worldwide announced aggressive expansion in Africa and the Indian Ocean, increasing its market penetration across the region. Currently the company has a strong footprint with 34 operating hotels and a pipeline of 20 hotels under development.

With the expansion of its luxury, upscale and mid-market brands, Starwood will grow its portfolio by over 50% in the next five years, with more than 50 hotels operating and nine out of its 10 lifestyle brands in the region.

Mövenpick Hotels & Resorts (MH&R) will debut in three new African markets over the next four years as it plans to establish a presence in key cities across the sub-Saharan region come to fruition. Increasing its Africa portfolio to 28 properties strong, MH&R will open three upscale hotels in Kenya, Nigeria and Ivory Coast between 2016 and early 2019.

Carlson Rezidor continues to strengthen its presence in Africa, the company’s most important growth market. The group announced the first Radisson Blu Residence in Nairobi, Kenya. The property with 123 units will welcome the first guests in late 2016. It is Carlson Rezidor’s third project in Nairobi and at the same time the group’s fifth Radisson Blu residence in Africa – a growing segment that it plans to deploy further in capital cities across the continent.

Hilton has announced the upscale Hilton Awassa Resort & Spa which is expected to open in 2020. The 169 room and villa resort will join Hilton Addis Ababa, which has been in operation for more than 45 years. The new property, agreed with Sunshin‎e Business, will occupy a prime position on Lake Awassa and provide for both leisure and business guests. The signing marks Hilton Worldwide surpassing 20 000 rooms either trading or under development across Africa.

Marriott International, in partnership with Sunshine Business, opened Africa’s first Marriott Executive Apartments in Addis Ababa, Ethiopia, adjacent to the UN-ECA headquarters and conference center. The Marriott Executive Apartments Addis Ababa is aimed at both business and family travellers with 108 fully serviced apartments.

Best Western revealed a completely new look focused on contemporising the look of the company and placing more of an emphasis on all six of the company’s hotel brands. Best Western International will be renamed Best Western Hotels & Resorts and use a new logo to identify the master company for its six distinct brands.