Although coming off a low base, the growth in sub-Saharan Africa’s development pipeline over the past year is ahead of the 4% growth in Europe, 8.6% growth in Asia Pacific and 9% growth in North Africa.
The pipeline in North Africa has experienced relatively little growth, for two reasons – several hotels in previous years’ pipeline data opened in 2012 (Accor alone opened 8 hotels with 1,153 rooms in Algeria, Morocco and Tunisia), and the political turmoil in the region has had a negative effect on new investment and, therefore, new deals. Several hotels which are in the pipeline have effectively been suspended, pending a return to sustained normality.
W Hospitality Group MD Trevor Ward said last week there was "a boom in Africa, in all sectors, including hotels".
"Economic growth in many countries is 6% or higher and global investors are looking at the continent in a much more serious and sophisticated way," he said.
"We are being contacted by an increasing number of dedicated investment funds seeking to enter the African hotel market.
"The main reasons for the slower growth in North Africa included the opening of hotels in last year’s pipeline, particularly in Algeria, as well as a reduced investment focus on North Africa due to political concerns and a greater emphasis on development in sub-Saharan markets," Mr Ward said.
Five countries of North Africa all appeared in the top 10 countries for new hotels, led by Egypt with 7,644 planned new hotel rooms, Morocco with 5,178 and Algeria with 3,160 rooms. In sub-Saharan Africa, Nigeria had "by far the largest pipeline", with 7,470 planned new rooms, W Hospitality said.
"The companies leading the way are Hilton Worldwide, with 6,230 rooms in its African pipeline; Carlson Rezidor, with 5,947; Accor, with 5,165; and Marriott, with 3,900."
Mr Ward said the major international brands "are still blazing the trail, led by Hilton Worldwide, forging ahead with 6,230 planned new rooms for Hilton, Doubletree and Garden Inn brands, an extraordinary 84% increase on 2012".
He said it was "extremely encouraging" to see new brands entering the market, including Campanile, Dusit, easyHotel, Fairmont, Hyatt Place and W Hotels Worldwide.
"This shows the confidence of the hotel chains not just in the continent conceptually, but also as somewhere where they can diversify their brand footprint," Mr Ward said.
Avior Research hotels and gaming analyst De Wet Schutte said the increased development activity in Africa was due to the growth prospects on the continent and the fact that growth in room numbers had not kept up with gross domestic product growth over the past decade. Local hotel groups "are aware of the fact that they need to go north", with relatively limited opportunities for expansion in South Africa.
However, most of the groups increasing their presence in Africa were first-world hotel groups that brought big brands and big customer databases. While these groups were not necessarily better operators, they had a funding advantage over local players.
Source: BD
