Africa’s hospitality industry

Africa’s hospitality industry rises - says leading hotel consultancy

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The face of Africa’s tourism and hospitality sector has transformed almost completely from what was once known as the ‘dark continent’ whose narrative was riddled with stories of famine, poverty and political instability to ‘Africa is open for business’ and home to some of the world’s fastest emerging-market economies.

The TopHotelProject database, a platform that receives direct input from the hospitality, tourism and leisure sectors globally proves this to be the case in Africa. The database indicates that, in Africa, 116 hotel projects are in the planning phase, 155 projects are under construction, 36 projects are in the pre-opening phase and 42 projects are near completion.

“Africa is open for business, which means there is a growing demand for lodging of an international standard. And it is this demand that creates the business case for investors with an appetite to invest in Africa, especially in countries with visible economic activity,” says Michele de Witt, director for Horwath HTL South Africa – a leading international hotel consulting organisation instrumental in growing the sector across English-speaking sub-Saharan Africa.

However, the sector differs from country to country and according to de Witt South Africa’s hospitality landscape is different to that of other sub-Saharan African countries.

“It is very difficult to paint sub-Saharan Africa with one brush stroke. This is a vast continent and each country has a unique development history, which shapes its attractiveness for travel and tourism-related activities, as well as potential hotel investment,” says de Witt.

Growing the hotel sector is hard work and before making that investment decision, de Witt says investors ask several essential questions. She says a robust economy is crucial; so is hassle-free inbound air travel to guarantee access to the country and transport development and infrastructure too. 

“These are very important requirements for hotel investors and each of these points are vital to consider. In my view, the top sub-Saharan African countries that are succeeding and getting it right: Addis Ababa, Ethiopia; Nairobi, Kenya; Dakar, Senegal and Kampala, Uganda,” she says.

According to de Witt, the process in getting a hotel off the ground is multi-faceted and it starts with an individual or corporation interested in investing in a country by developing a building suitable for operating a hotel. She says in addition to the investor appointing a hotel management company to manage and market the hotel on their behalf, undertaking a market analysis and financial feasibility study is considered a ‘crucial first step’ in the hotel development process.

To-date Horwath HTL assisted nearly 2 000 potential hotel investors to assess the viability of their project across sub-Saharan Africa. In addition, the organisation has worked on projects associated with some of the largest international hotel management companies active on the continent, including Carlson Rezidor, Hilton Worldwide, Tsogo Sun in Africa and Starwood Hotels and Resorts.

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