The N’Djamena Hilton in Chad, complete with 500-person ballroom (Hilton)

Markets

Hotel building to soar 40% in Sub-Saharan Africa

11 April 2016 | By GCR Staff | 0 Comments

About 64,000 hotel rooms are to be built in Africa in 2016, an increase of almost 30% on the previous year, according to a report from W Hospitality Group.

The increase is driven by growing activity in sub-Saharan Africa, where the development pipeline for 2016 is 42% greater than the previous year, despite the economic constraints imposed by lower global prices for oil, gas and other commodities.

The figures for this region have once again outstripped north Africa, where development is expected to rise by 7.5% this year.

Trevor Ward, W Hospitality Group’s managing director, said: “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.”

Over the past five years, hotel building in the north has remained static, with about 75 hotels being built each year. In the south, however, hotel building has increased every year, growing from 76 in 2011 to 191 in 2015.

The 2015 report comments that this is partly the result of “catch-up”, as hotel chains in the past have not shown a great appetite for African investment.

Even when pummelled daily by low commodity prices, exchange rate problems, political challenges and poor infrastructure, Africa remains resilient– Trevor Ward, W Hospitality Group managing director

This is beginning to change: Mauritania, for example, now has its first three branded hotels under construction, and the Hilton chain will opened its first property in Chad in January 2015, and will make its debut in Botswana later this year.

Hilton Worldwide operates 38 hotels in Africa, and has 38 more are in the pipeline. The company plans to expand its presence in all of the major cities in sub-Saharan Africa. 

Michael Cooper, the vice president for development in Africa, told the trade website Travelmarket: “We’re working our way up the map.”

By far the largest market in sub-Saharan Africa is the west of the country, which accounted for 53% of the market in 2015. This is more than twice as large as the next largest region, east Africa, which made up 24% of the market. This reflects the growth in the Nigerian economy, which has become the dominant force in African hospitality – a role that it has taken over from Egypt.

The country that has shown the greatest growth in 2016, however, is Angola. In July last year, AccorHotels signed a deal to build 50 hotels with around 6,200 rooms, all of which are under construction.

And in September, a UK-registered investment company called GoldenPeaks Capital Holdings signed a contract to build two and three-star hotels in all 18 provinces of Angola over the next three years at a cost of about $1.2bn.

Photograph: The N’Djamena Hilton in Chad, complete with 500-person ballroom (Hilton)