The key nodes for hotel development in East Africa are Addis Ababa (Ethiopia), Dar es Salaam (Tanzania), Kampala (Uganda), Kigali (Rwanda), and Nairobi (Kenya). Economic growth and political stability in these nodes has led to extensive hotel development in East Africa, with these nodes collectively representing more than 14,000 quality hotels in 2019.
Recent hospitality research done by the hospitality consulting firm, HTI Consulting, highlights the size of the development pipeline projected for these nodes in East Africa. More than 6,000 quality hotel rooms are planned for the region, with 67% of the planned development currently under construction. This equates to approximately 4564 quality rooms planned to enter the East African hotel market in the short term.
Addis Ababa is the leader of development, with more than 2,000 quality rooms currently under construction in the node, representing 54% of total hotel development under construction in the East African cities assessed. Of the expansions under construction in Addis Ababa, Accor Hotels has the strongest pipeline with 925 rooms planned to enter the market in the short term. Following Accor Hotels, Marriott International have a strong hotel expansion strategy in the region, with 659 hotels planned for Addis Ababa.
Following Addis Ababa, Nairobi has the second strongest development pipeline currently under construction with just over 1,000 quality rooms planned to enter the market in the short term. Nairobi has always been a hub for expansion driven by a strong corporate market and regional conference and convention activity. However, development has slowed during recent years.
Currently 76% of planned expansion projects are under construction, with all major international brands planned to enter the market in the short term. Hilton International have the strongest expansion pipeline, with more than 600 rooms currently under construction, followed by Accor (334) and Hyatt (223).
Dar es Salaam (416 quality rooms), Kampala (237 quality rooms), and Kigali (161 quality rooms) have the smallest expansion pipelines under construction. Kigali experienced a notable growth in hotel supply between 2016 and 2018, with large-scale expansion projects entering the market, which have led to an oversupply within the market. The current levels of oversupply have limited expansion projects in the city, with the majority of new expansion projects taking place in more remote locations, such as the recent entry of the One&Only Nyungwe House in the remote Nyungwe Forest in northern Rwanda.
Despite levels of over supply experienced in the region, the strong corporate activity and growth of East Africa as a regional conference and convention hub is stimulating continued expansion, with East Africa seen as one of the attractive nodes in Africa for future projects.