Photo: Corbis Bartenders at a hotel in Lagos, Nigeria
Up and coming
By Wendy Atkins | Published: 15 November, 2011
Buoyed by strong growth in Africa’s tourism sector, a number of the world’s largest hotel chains are investing heavily in expanding their geographical footprints on the continent
As the economic downturn continues to claim casualties across Europe and North America, Africa is becoming an increasingly promising investment prospect for businesses; and in the leisure and hospitality sector, some of the world’s biggest hotel brands are investing heavily to beef up their presence across the continent.
The global tourism sector has largely failed to excite in recent years, yet Africa has stepped up a gear according to statistics from the World Tourism Organisation. Its World Business Barometer update for the first half of 2011 reveals that sub-Saharan Africa performed soundly, with a 9 percent increase in international tourist arrivals. The rankings for international tourism arrivals show Morocco continuing to perform well – 24th in 2010 and 26th in 2009 – with South Africa ranking a creditable 32nd in 2010 and 31st in 2009. Rankings by international tourism expenditure put Nigeria 34th in both 2010 and 2009, with South Africa 35th in 2010 and 39th in 2009.
Given that six of the world’s 10 fastest growing economies over the past decade have been in sub-Saharan Africa, with the IMF forecasting the region’s tally will swell to seven in the next five years, such statistics should not come as a surprise. Added to this, an under-supply of quality hotels combined with strong GDP growth, greater demand for natural resources, an increase in travel and air traffic are helping to fuel this growth. Inter-African trade, boosted by improved telecommunications and travel infrastructure, is also playing its part in expanding the regional market.
“Africa has a strong and growing international market and an even stronger domestic market,” says Rudi Jagersbacher, area president for the Middle East and Africa region at Hilton Worldwide. “In 2010, international arrivals rose by 6 percent to 49m. This was slower than Asia and the Americas, but twice the growth rate for Europe, and the UNWTO forecasts that inbound tourism to Africa will increase by over 50 percent from 2010 to 2020. Currently, 50 percent of the guests who stay in our hotels in Africa, excluding Egypt, are from the continent.”
According to many industry insiders, the massive growth in hotel numbers planned across much of sub-Saharan Africa is the result of a history of under-supply of quality accommodation. Andrew McLachlan, Rezidor Hotel Group’s vice president for Business Development in Africa and Indian Ocean Islands told This is Africa: “There’s either a complete lack of branded hotels in larger cities, such as Luanda, or an outdated hotel inventory such as Lagos, as well as up and coming new destinations, such as Tete.”
Companies that have identified these opportunities and are rapidly expanding their footprint across the continent include Accor Group, Hilton, InterContinental Group, Starwood and Rezidor Group.
Accor Group says it expects to open more than 40 new hotels with in excess of 6,000 rooms across Africa by 2014, up from its current base of 106 hotels and more than 16,000 rooms. The company comments: “We are well established in the western part of Africa and we are looking at developing in eastern parts of the continent.”