One of the leading hospitality and consultancy firms in Nigeria, W Hospitality Group, Lagos, has in its seventh edition of the Hotel Chain Development Pipelines in Africa 2015, a detailed survey on the hospitality industry development profile, chronicled the state of the ever – growing hotel sector industry with particular reference to growth expectations and its underlining factors; and concludes that almost 50, 000 rooms are in the pipelines this year with the number of rooms in sub-Saharan Africa exceeding North Africa by almost 70%, writes ANDREW IRO OKUNGBOWA.
For this year’s survey, 37 hotel chains with 80 brands contributed to the study – the highest since the survey debuted in 2009 with just about 19 chains. The study also established the fact that investing in hotel development in the continent is a herculean task; however, this is not enough to deter investors and hotel chains, as many of them are ever determined to explore the abundant opportunities that the continent offers, hence some of them have set up offices in the continent. The study also noted the growing interest in the number of hotel investment conferences on the continent with the African Hotel Investment Forum (AHIF) as one of the leading fora.
The event held in Addis Ababa, Ethiopia last year and was said to have attracted over 500 delegates from 47 countries and it was sponsored by over 35 companies – international hotel brands, the leading advisory firms, governments, developers and banks. AHIF will again be held in Addis Ababa in 2015.
According to this year’s findings, of the eventual 33 contributing chains, a total of 270 hotels translating to 50, 000 rooms are in the development pipeline with North Africa recording 79 hotels with 18, 565 rooms while Sub – Saharan Africa recorded 191 hotels with 31, 150 rooms bringing the total to 49, 715 rooms. Whereas the figures of last year show that North Africa recorded 73 hotels with 16, 449 rooms and Sub – Saharan Africa 142 hotels with 23, 283 rooms bringing the total number of hotels to 215 and rooms to 39, 732. The pipeline for sub-Saharan Africa (SSA) continues to grow much faster than the North African region.
The SSA region, of course has far more markets than North Africa, 49 countries compared to five of North Africa. Many of the SSA markets have historically been underserved with branded hotels and are now playing catch up – Mauritania, for example, with no existing branded supply, now has three branded hotels in the development pipeline. Growth in the pipeline in North Africa has slowed considerably, impacted by unrest and political conflict in the region. Egypt, which has traditionally been a major growth market, lost some projects off its pipeline due to delays and the cancelling of some deals in 2014.
Libya, a country which many groups were focusing on just two years ago, has seen no new activity in terms of hotel development deals, for obvious reasons. According to the details of the findings, West Africa accounts for 53% in of the rooms in the pipeline in sub-Saharan Africa, followed by East Africa with 24%, Central Africa with 12% and Southern Africa with 11%. Besides having the largest numbers of rooms, West Africa also have the highest numbers of countries – 13 – where activities are in the pipeline with Nigeria said to have largest economy, the largest population, and the largest number of urban conurbations in one country, with the exception of South Africa.
As in previous years, Southern Africa continues to lag behind, with fewer rooms in the regional development pipeline this year than in Central Africa, and with the highest number of countries with no activity at all – five, namely Botswana, Lesotho, Malawi, Swaziland and Zimbabwe. While the reports combined both signed deals and on site projects in the pipeline, it however revealed that sub-Saharan Africa has more deals on site and under construction than North Africa.
In 2014, North Africa had 75 per cent of its signed deals on site, compared to 56 per cent in SSA. In terms of total pipeline status, Sub – Saharan Africa has 191 hotels with 31, 150 rooms whereas in terms of on site construction it has 17, 070 hotels translating to 54% while North Africa has a total pipeline status of 79 hotels with 18, 565 rooms but 14, 428 translating to 46% in terms of on site construction. In terms of countries’ perfor-mances, Nigeria heads the top leading countries in Sub – Sahara when it comes to number of rooms with 51 hotels and 8, 563 averaging 168 in size.
This is followed by Egypt with 18 hotels and 6, 440 rooms averaging 358 then Morocco with 31 hotels and 5, 474 rooms averaging 177 in size, Algeria with 13 hotels and 2, 749 rooms, averaging 211 in size, Tunisia with 12 hotels and 2, 444 rooms averaging 204, South Africa with 13 new hotels and 1,662 rooms averaging 128 in size, Kenya with 8 hotels and 1, 510 rooms averaging 178 in size, Libya with 5 hotels and 1, 458 rooms averaging 292 in size, Ghana with 8 hotels and 1, 399 rooms averaging and 175 in size and Uganda has 9 hotels and 1, 397 rooms averaging 155. Egypt regarded the highest performing country in Africa with almost 5,500 rooms under construction, compared to Nigeria’s figure of 3,400 rooms.
Furthermore, the reports also took a look at cities with Lagos topping the chart of the 10 cities with the highest number of planned rooms. Lagos has 3, 611 rooms followed by Cairo with 2, 704, Abuja with 2, 177, Marrakech with 1, 970, Sharma el Sheikh with 1, 761, Algiers with 1, 341, Dakar with 1, 326, Nairobi with 1, 220 and Kampala with 1, 181. From the findings, Egypt has two of the largest destinations for new hotel deals, Cairo and Sharma el Sheikh. Lagos and Abuja, the commercial and political capital respectively of Nigeria, are both in the top three cities. However, of the 11 hotel deals signed in Abuja, only two, the Fraser Suites and the Hilton Garden Inn are actively under construction.
The study also looked at the top 10 international brands in the market by number of hotels and rooms with Carlson Rezidor’s Radisson Blu in the lead with 22 hotels and 5, 372 rooms, Hilton with 16 hotels and 4, 965 rooms, Marriott with 11 hotels and 2, 316 rooms, Park Inn by Radisson with 10 hotels and 1, 581 rooms, Hilton Garden Inn with 9 hotels and 1, 682 rooms, Noom with 9 hotels and 1, 332 rooms, Sheraton with 8 hotels and 1, 862 rooms, Four Points by Sheraton with 7 hotels and 1, 250 rooms, Golden Tulip with 7 hotels and Mantis with 7 hotels while Courtyard by Marriot has 1, 154 rooms.
The findings also made interesting projection of what the future holds with 2015 having 79 hotels and 10, 599 rooms due to open in Africa, 2016 has 80 hotels and 14, 073 rooms, 2017 has 55 hotels and 10, 988 rooms and 2018 has 39 hotels and 8, 671 rooms while 2019 holds 11 hotels and 2, 685 rooms and 2020 with 4 hotels and 1, 157 rooms.
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