Our hotel consultants at HTI Consulting undertook research into the top five growth markets in Africa, as covered by STR Global and in which HTI Consulting has extensive experience. A total of 12 cities were assessed.
Our hotel consultants found that Nairobi showed the strongest growth of the markets reviewed. The occupancy in the city increased by 11,7%, despite an increase in rooms available of 13,2%. In addition, the rooms sold grew by 26,4%. The strong growth in hotel demand for Nairobi was driven by a surge in visitor arrivals to the country. Our hotel consultants determined that the arrivals grew by approximately 35% in 2018 after a concerted effort to position the country as a destination of choice. This has positively affected the Nairobi market, which has attracted higher levels of international corporate and leisure demand.
The hotel consultants further indicated that whilst ADR declined by 5,6% in Nairobi, the level of occupancy growth drove an increase in RevPAR of 5,5%. Whilst Nairobi was expected to continue its positive trajectory into 2019, the hotel consultants found that the terror attacks in the city in January have had an impact, although not to a significant extent as yet. Rooms sold declined by -0,1% YTD February 2019.
Lagos was the second strongest market performer with an increase in occupancy of 7,7% and an almost equivalent level of growth in the number of rooms sold. As the Nigerian economy continues to recover, the supply of rooms in Lagos continues to be absorbed.
Addis Ababa showed the third strongest growth of the markets assessed with occupancy and rooms sold having increased by 11,6%. The improved and continually improving political and economic situation in the country has been a primary driver of the positive growth.
Accra and Sandton were the fourth and fifth contenders in terms of market growth for 2018. Accra’s positive economic growth (projected at 5,7% for 2018) continues to drive positive demand for accommodation according to the hotel consultants. Sandton’s positive growth in rooms sold is surprising considering the political and economic challenges facing South Africa. The hotel consultants report that the midscale segment is driving, in part, the greater number of rooms sold, as new, affordable, and contemporary supply is attracting new markets to the Sandton node.
The year 2018 was an exciting one for the African market. For more information on these and other hotel markets in Africa, contact HTI Consulting. We are one of the leading consultants for hotels in the African market.