Latest analysis by STR Global, leading provider of information at the hotel industry, reveals that despite high levels of inflation and political uncertainty, Africa is proving that it’s a growing tourist and business destination as hotels in multiple key markets are reporting performance increases for year-to-date (YTD) June 2013.
However, a gigantic barrier for Africa tourism is the inability of transportation infrastructure. However some low-cost commercial airlines have emerged during the last decade, just a small percentage of airfields are paved and airlift remains limited by reason of high operating costs. Africa’s railway infrastructure isn’t without its own set of challenges as a result of limited interconnected rail systems as some of the national rail systems operate independently. Non-standardised gauges, break systems and traction and obsolete equipment further compound the placement.
“In spite of many unsolved problems, Africa shows a promising future. There may be an increasing interest in some of countries, particularly in sub-Saharan Africa where tourism is more developed. Tanzania has recorded YTD June 2013 growth in Revenue per available room (RevPAR) of 10.6 percent, largely owing to successful April and June, which saw a 25.7 percent and 27,4 percent increase in RevPAR in USD terms at the prior year, respectively.” said Elizabeth Randall Winkle, Managing Director of STR Global.
Egypt as an exception has continued to be afflicted by the ill effects of its revolution when occupancy rates dropped as little as 15 percent in February 2011 in Cairo. The capital have been experiencing ongoing unrest and the hot overthrow of President Morsi will determine a special story. Hotels within the Red Sea resorts are still attempting to recover and although occupancy is up 24.7 percent YTD June 2013 to realize occupancy levels of 45.2 percent that’s on par with Cairo, it’s still below the 61.7 percent achieved by hotels within the Red Sea Resort YTD June 2010.
Moroccan hotels then again, having avoided any major upset, have shown an outstanding performance YTD June 2013 with growth in occupancy (17.0 percent) and RevPAR (7.9 percent).
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Within sub-Saharan Africa, YTD June 2013 hotel performance data for South Africa shows a notable increase in occupancy (4.8 percent) however the decrease in both average daily rate (-7.7 percent) and RevPAR (-3.3 percent) are indicative of an ongoing recovery from inflated rates and the surge of recent supply in the course of the World Football Cup in 2010.
Botswana, Kenya, Mauritius and Tanzania rely heavily on international tourism, offering splendid beach destinations and/or safaris. In accordance with the WTTC[1], total tourism contribution to GDP for Mauritius is 28 percent, that’s above the arena average (9 percent). A lot of these markets remain depending on leisure tourism. Whilst most African economies are more agrarian and according to mining of natural resources, one of many biggest challenges for opening a hotel in this continent is finding well educated staff and coaching them to deliver a world standard of service.
Nigeria shows the best RevPAR growth YTD June 2013 (15.2 percent) and the very best average daily rate (ADR) a number of the African countries at US$273.80. The second one highest ADR are located in Mauritius (US$227.08), where besides the strong leisure demand for its resorts, this small economy hosted the FIFA[2] Congress 2013, welcoming around 1,300 guests.
The World Bank is currently financing 1,091 activities in 6,277 mapped locations in Africa worth US$49.3 billion. Despite high levels of inflation and political uncertainty, Africa has not deterred hotel developers from being excited about the continent and its popularity is probably going to grow inside the next 10 years with a wealth of resources and abundant untouched areas.
“Africa is a key growth market with a lot of exciting prospects ahead. The present undersupply of hotels, end result of the continent’s natural resources boom and a growing middle class, means there are many opportunities for internationally branded hotels,” said Mark Willis, Area Vice chairman Middle East and Sub-Sahara Africa The Rezidor Hotel Group. “Our development strategy is heading in the right direction and over the subsequent 24 months we shall open more Radisson Blu and Park Inn by Radisson properties in cities including Freetown, Nairobi, Kigali, Libreville, Marrakech and Hammamet.”
Further details on trends within the hotel markets across Africa can be presented on the Africa Hotel Investment Forum (AHIF) in Nairobi at the 23-25 September where two speakers from STR Global would be at the formal agenda.
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