Hotel investments rise as West Africa primes destinations
Africa is now being seen as one of the most promising regions for hotel developers globally.
Across the continent, hotel development remains important in the more advanced economies, such as Morocco and South Africa. Projects are also multiplying in East Africa, especially in Ethiopia, Kenya, Tanzania and Uganda.
Aside from small chains and independents, four global hotel groups dominate signings and openings on the continent. Over the last four rolling quarters, as of September 2019, Accor, Hilton, Marriott International and Radisson Hotel Group have opened 2,800 rooms and signed deals for 6,600 rooms.
In West Africa, Nigeria is back on the development scene, thanks to emerging regional destinations beyond Abuja and Lagos. Francophone Africa is also moving fast.
For instance, the Ministry of Tourism of Ivory Coast recently launched an ambitious national plan for tourism development, Sublime Cote d’Ivoire, with more than US$1 billion (Sh100 billion) invested.
Senegal is the other regional star, with local programmes such as Diamnadio, Lac Rose near Dakar and Pointe Sarene.
West African countries showing active hotel development include Benin, Cameroon, Guinea, Niger, and Togo.
According to the World Tourism Organisation (UNWTO), international tourist arrivals in Africa grew by seven per cent in 2018, one of the fastest growth rates.
Philippe Doizelet, Managing Partner in charge of Hotels at Horwath HTL, a leading hospitality consultant told a leading hotel investment seminar in Francophone Africa that four main factors are fuelling an increasing flow of investment into hotels in the region.
These are air connectivity, better economic growth, currency and demographics.
In the past few years, additional flight connections have transformed travel to and from the region.
Secondly, many West African economis are expanding faster than many other economies globally.
Later this year 15 countries will adopt the Eco, a new, free-floating, common currency, designed to reduce the cost of doing business between them and so increase trade.
“The population is also young and growing fast,” says Doizelet.
However, insecurity issues, political agenda, governance and increasing public debt threaten economic progress.