Sub-Saharan Africa Experiencing Hotels Boom After Years Of Neglect

Written by Kevin Mwanza

For the first time since 2009 more international and regional hotels chains are expanding into sub-Saharan Africa than in North Africa as demand for hotel rooms and services in the southern countries that had been neglected by hospitality investors for a long time due to difficult economic conditions, picks up in tandem with rising economies in the region mainly fuelled by an oil and gas boom and a growing middle class.

A report by Lagos-based consultancy W Hospitality Group showed that for the first time since the survey began in 2009, international and regional hotel chains are signing more deals in sub-Saharan Africa than in North Africa.

“The big story this year is a dramatic surge in interest from the hotel chains in sub-Saharan Africa, W Hospitality MD Trevor Ward was quoted by BDlive saying.

“The continent generally has never been an easy place to do business and is likely to remain more challenging than Europe or even China. However, the lack of quality hotel rooms, not just in the capitals but also in the secondary cities, is so marked that the major international chains now cannot ignore the opportunity.”

The number of branded hotel rooms planned for sub-Saharan Africa has risen consistently since 2011, from 13,700 in then to 23,283 rooms this year, while the number of hotel deals signed roseĀ  at a compound annual growth rate of 13%, from 77 hotels in 2010 to 142 hotels this year.

BDlive said that out of the 38 countries surveyed, Nigeria ranks highest both in terms of the number of hotels and the number of rooms in the pipeline, which is about 40 percent more than the second-ranked country, Morocco.

The 49 countries of sub-Saharan Africa now have a development pipeline that is more than 40 percent greater than the five countries in North Africa, in double the number of hotels. By contrast, North Africa, which experienced negative growth last year, continues to be hurt by the unrest in many markets in the region, particularly Egypt, where projects have either been suspended or cancelled.

Natural resources and workforces

On the flip-side of sub-Saharan Africa growth is that less than 60 percent of the rooms in the pipeline are under construction, compared with 75 percent in North Africa.

“Africa offers excellent opportunities due to its huge natural resources and workforces, improved infrastructure, and a growing middle class. However, the continent still suffers from an imbalance between supply and demand for internationally branded hotels with world-class standards and services, and we want to change that,” Wolfgang M. Neumann, President & CEO of Carlson Rezidor Hotel Group, told Hotel News Resource in an interview.

Carlson Rezidor is one of the most dynamic hotel groups worldwide and holds the largest hotel pipeline in Africa with 30 hotels and 6,300 rooms under development. The Group opened its first hotel in Africa in 2000, the Radisson Blu Waterfront Hotel, Cape Town South Africa, where it has a regional office. Since then, the group has built up an impressive network of 24 hotels and 5,800 rooms in operation and 30 hotels and 6,300 rooms under development across the continent.