Nigeria, Biggest Attraction In Africa’s Hotel Business | Independent Newspapers Limited
Newsletter subscribe


Nigeria, Biggest Attraction In Africa’s Hotel Business

Posted: Apr 12, 2016 at 3:00 am   /   by   /   comments (0)





Nigeria has emerged as the biggest attraction in the hotel business in Africa, eclipsing North African rivals on the back of a steep rise in the fortunes of sub-Sahara Africa, according to a new report.

The report shows Nigeria to have 61 planned hotels for 2016 with no less than 10, 222 proposed hotel rooms, a figure, which puts the country ahead of the top ten countries with biggest attraction for hotel business in Africa.

The report by W Hospitality Group, Hotel Chain Development Pipeline Survey, Nigeria, posted the figure showing that sub-Sahara Africa remains a kin interest for investors in the hospitality business.

A highlight of the report that indicates growth in the sub-continent is that Angola, which never featured among the top ten, shoved aside Egypt to take the second spot.

Nigeria and Angola account for 17,782 rooms between them, almost 30% of the total pipeline and 40% of the signed rooms in sub-Saharan Africa.

According to the ranking, Egypt is now placed third. Other countries in the top ten are Morocco, Algeria, Tunisia, Kenya, Ethiopia South Africa and Senegal in that order.

Trevor Ward, the report’s author, explains the rise of sub-Saharan Africa in the hospitality business: “There are two reasons why development activity in North Africa is now somewhat subdued. First, 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.”

W Hospitality does a survey of planned hotel rooms in Africa as an investment advisory. In its recent survey, the group showed that the number of planned hotel rooms in Africa has soared to 64,000 in 365 hotels, up almost 30 percent on the previous year, according to new figures from the annual report.

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.

According to Ward, who is also managing director of W Hospitality Group, “The evidence from our survey is clear, investors remain confident about the future of the hospitality industry on the continent. Even when pummelled daily by low commodity prices, exchange rate problems, political challenges and poor infrastructure, Africa remains resilient.”

The International Monetary Fund (IMF) forecast economic growth in sub-Saharan Africa to be 4 percent in 2016, growing to 4.7% in 2017, up from 3.5 percent in 2015.

The projections are lower than the 5-6 percent growth enjoyed over the past decade, but it’s still double or more the forecast for the world’s advanced economies of 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.”

This is the eighth annual pipeline survey, widely recognised as the most authoritative source on hotel industry growth in Africa, particularly in revealing data on international chains signing new deals.

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’s possible to see how far hotel development in Africa has come. In 2009 there were 19 international and regional hotel chains contributing, with a pipeline of 144 hotels and just fewer than 30,000 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 percent higher than that in sub-Saharan Africa. Today, it is less than half.