As hotel consultants in Africa, HTI Consulting recently published data on key African markets in order to guide clients and potential investors. In 2018, our hotel consultants have consulted in over 10 African countries, including Botswana, Nigeria, Mauritius, Ghana, Zimbabwe, South Africa, Tanzania, Mozambique, Ethiopia, Zambia, and Senegal. Based on their research and experience in the African markets, our hotel consultants provided an overview of the top five hospitality growth markets for the first six months of 2018 based on statistics provided by STR.
The research by our hotel consultants shows that Accra and Lagos are showing a strong return to growth with occupancy increases of 10,3% and 8,2% respectively. The hotel consultants also revealed that roomnights sold in each city grew by the same percentages.
Gaborone showed the third strongest levels of occupancy growth according to our hotel consultants. The occupancy of the city grew by 4,3%. After experiencing high levels of new supply combined with a decline in demand owing to economic challenges, the research indicated that the hotel market is on an upward trend. The extent of this trend will, however, be dependent on the outcome of the country’s elections in 2019.
Our hotel consultants specialising in Kenya found that although occupancy in Nairobi remains under pressure due to a 10,8% increase in rooms available in the first six months of 2018, the demand for hotels in the city continues to grow with roomnights sold increasing by 10,1%. Our consultants concluded that the growth is being driven by a recovering business and leisure environment after the election violence, albeit isolated, in 2017. Should this pace of growth continue, the new supply in the market will be able to be absorbed at a reasonable rate. The pipeline for development in the city does, however, remain full with an estimated 1 800 rooms planned to enter the market within the next three to five years.
Occupancy in Addis Ababa showed a return to growth for the first six months of 2018. Our consultants revealed that occupancy and rooms sold in the city increased by 1,9%. They also indicated that a turnaround in the market is expected going forward, given the pro-active economic and political steps being undertaken by the country’s new leadership.
In conclusion, the African markets are volatile and are very sensitive to macro and micro forces. The positive growth in Accra and Lagos comes off a period of decline linked to global oil prices and Ebola. Terror related attacks in Nairobi also negatively impacted the market and just as the market entered a recovery phase, political challenges over the election period resulted in a growth setback.
HTI Consulting has conducted recent work in the aforementioned markets and our hotel consultants are well positioned to assist you with any queries relating to these markets.