Press Release

03 Jun 2015

Hotel Development in Africa Accelerates to 50,000 Rooms

PRESS RELEASE: Hotel Development in Africa Accelerates to 50,000 Rooms
 
4th June 2015
 
The findings of this year’s Hotel Chain Development Pipeline Survey, produced by W Hospitality Group, a vital strategic advisor to the Africa Hotel Investment Forum (AHIF) http://africa-conference.com/, show a surge in hotel development in Africa, with a jump in the development pipeline to 270 hotels and nearly 50,000 rooms, and with sub-Saharan Africa (SSA) exceeding North Africa by almost 70%. The data reveal a modest recovery in North Africa and increasing confidence in SSA - only two years ago the number of rooms in the North African pipeline was the same as that in sub-Saharan Africa. This year’s survey is based on contributions from 37 international hotel chains with 80 brands between them.
 
TABLE 1
 
2015 Hotel Chain Development Pipelines in Africa
 
Regional Summary
 
2011
Hotels     - North Africa - 75
    - Sub-Saharan Africa - 76
      - TOTAL - 151
Rooms   - North Africa - 17,038
        - Sub-Saharan Africa - 13,700
  - TOTAL - 30,738
 
2012
Hotels  - North Africa - 77
    - Sub-Saharan Africa - 100
     - TOTAL - 177
Rooms   - North Africa - 17,217
        - Sub-Saharan Africa - 17,109
  - TOTAL - 34,326
 
2013
Hotels  - North Africa - 73
    - Sub-Saharan Africa - 115
     - TOTAL - 188
Rooms   - North Africa - 18,065
         - Sub-Saharan Africa - 18,191
         - TOTAL 36,256
 
2014
Hotels  - North Africa - 73
    - Sub-Saharan Africa - 142
     - TOTAL - 215
Rooms   - North Africa - 16,449
        - Sub-Saharan Africa - 23,283
  - TOTAL 39,732
 
2015
Hotels  - North Africa - 79
    - Sub-Saharan Africa - 191
     - TOTAL - 279
Rooms   - North Africa - 18,565
        - Sub-Saharan Africa - 31,150
  - TOTAL - 49,715
 
 
The SSA region has far more national markets than North Africa, 49 countries vs five[1] and these have historically been underserved with branded hotels. It’s now time for them to catch up and they are: Mauritania, for example, with no existing branded supply, now has three branded hotels in the development pipeline.
 
Growth in the pipeline in North Africa has slowed considerably, impacted by unrest and political conflict. For example, Libya, a country which many groups were focusing on just two years ago, has seen no new hotel development deals. Egypt, which has traditionally been a major growth market, lost some projects to delays and cancellations in 2014.
 
As a sub-region, West Africa has by far the greatest number of rooms in the pipeline, more than double East Africa. This is largely thanks to Nigeria, which became the largest economy on the continent in 2014 after it rebased its GDP figures. It has the largest population and the largest number of urban conurbations in one country, with the exception of South Africa.
 
As in previous years, Southern Africa continues to lag behind, with fewer rooms in development this year than in Central Africa and with the highest number of countries with no activity at all – five, namely Botswana, Lesotho, Malawi, Swaziland and Zimbabwe.
 
It is important to distinguish between deals which are still in the planning stage and those which are becoming reality, with construction started. Table 3, below, shows the proportion of the deals (rooms) which are actually under construction – sub-Saharan Africa has many more signed deals than North Africa, but the latter has 78 per cent of the pipeline rooms on site, compared to 55 per cent in SSA.
 
TABLE 3
 
2015 Hotel Chain Development Pipelines in Africa
 
SSA vs. North Africa by Pipeline Status
 
Sub-Saharan Africa
Hotels - 191
Rooms Total - 31,150
Rooms Onsite Construction - 17,070 / 55%
 
 
North Africa
Hotels - 79
Rooms Total - 18,565
Rooms Onsite Construction - 14,428 / 78%
 
Looking at individual countries, Nigeria has by far the most rooms in the chains’ development pipelines, over 8,500 rooms in 51 planned new hotels. That is more than the entire pipeline in Central Africa and East Africa combined! Table 4 shows the top ten pipeline countries by number of rooms:
 
TABLE 4
2015 Hotel Chain Development Pipelines in Africa
Top 10 Countries by Number of Rooms
 
1 - Nigeria
Hotels - 51
Rooms - 8,563
Average Size - 168
 
2 - Egypt
Hotels - 18
Rooms - 6,440
Average Size - 358
 
3 - Morocco
Hotels - 31
Rooms - 5,474
Average Size - 177
 
4 - Algeria
Hotels - 13
Rooms - 2,749
Average Size - 211
 
5 - Tunisia
Hotels - 12
Rooms - 2,444
Average Size - 204
 
6 - South Africa
Hotels - 13
Rooms - 1,662
Average Size - 128
 
7 - Kenya
Hotels - 8
Rooms - 1,510
Average Size - 189
 
8 - Libya
Hotels - 5
Rooms - 1,458
Average Size - 292
 
9 - Ghana
Hotels - 8
Rooms - 1,399
Average Size - 175
 
10 - Uganda
Hotels - 9
Rooms - 1,397
Average Size - 155
 
In 2015, all the countries in the top 10 (with the exception of Algeria and Libya) saw an increase in their pipeline from the previous year. Kenya and Uganda saw the largest increases, at over 100 per cent and 90 per cent respectively, albeit from a much smaller base than the four leading nations. Despite the continued difficulties that the country has faced, Egypt recorded a substantial 37 per cent increase in its pipeline, indicative of returning confidence.
 
Nigeria, Egypt and Morocco have occupied the top three slots since 2011. Whilst Nigeria has 33 per cent more rooms than second-placed Egypt, the average size of each planned hotel in Nigeria is less than half that in Egypt. New hotels in North Africa generally, and particularly in Egypt, are of a much larger size.
 
Egypt also has the highest “performing” pipeline in Africa, with almost 5,500 rooms under construction, compared to “only” 3,400 in Nigeria. Table 5 analyses the top 10 countries with the highest proportion of planned hotels under construction.
 
TABLE 5
2015 Hotel Chain Development Pipelines in Africa
Top 10 Countries by Pipeline Status
 
Hotels
 
Rooms
 
Rank – All Deals
 
Total
 
Onsite Construction
 
1 - Egypt
Hotels - 18
Rooms Total - 6,440
Rooms Onsite Construction - 5,480 / 85%
Rank Deals 2↑
 
2 - Morocco
Hotels - 31
Rooms Total - 5,474
Rooms Onsite Construction - 3,795 / 69%
Rank Deals 3↑
 
3 - Nigeria
Hotels - 51
Rooms total - 8,563
Rooms Onsite Construction - 3,369 / 39%
Rank Deals 1↓
 
4 - Algeria
Hotels - 13
Rooms Total - 2,749
Rooms onsite Construction - 2,494 / 91%
Rank deals 4↔
 
5 - Tunisia
Hotels - 12
Rooms Total - 2,444
Rooms Onsite Construction - 1,501 / 61%
Rank Deals 5↔
 
6 - South Africa
Hotels - 13
Rooms Total - 1,662
Rooms Onsite Construction - 1,196 / 72%
Rank deals 6↔
 
7 - Libya
hotels - 5
Rooms Total - 1,458
Rooms onsite Construction - 1,158 / 79%
Rank deals 8↑
 
8 - Ethiopia
Hotels - 8
Rooms Total - 1,326
Rooms Onsite Construction - 1,117 / 84%
Rank Deals -↑
 
9 - Kenya
Hotels - 8
Rooms Total - 1,510
Rooms onsite Construction - 1,050 / 70%
Rank deals 7↓
 
10 - Rwanda
Hotels - 7
Rooms Total - 1,351
Rooms Onsite Construction - 953 / 71%
Rank Deals -↑
 
Trevor Ward, Managing Director, W Hospitality Group, said: “What we’re seeing now is growing confidence right across Africa, including a recognition that there are opportunities beyond North Africa which can, and must, be exploited. Several of the international hotel chains have established local development offices, the newest being Hyatt in Nairobi, and the chains are more serious than ever about building their businesses below the equator.”
 
Matthew Weihs, Managing Director, Bench Events, the organiser of the Africa Hotel Investment Forum (AHIF), which attracts all the major international hotel investors in Africa, where this report will be discussed in detail, concluded: “Africa is becoming an increasingly attractive place to do business. There is much less conflict and political unrest than a decade ago; continent-wide economic growth is around5% and that is forecast to continue, national economies are becoming less reliant on natural resources and many countries have taken steps to become more business friendly and to attract international investment. As we can see from this fascinating report, those strategies are paying off handsomely.”
 
AHIF is the preeminent gathering of international investors in hotels in Africa. It takes place in Addis Ababa on Sept 30 - Oct 1, 2015. For more information, visit www.Africa-Conference.com
http://www.africa-conference.com/.
 
ENDS
 
About W Hospitality Group
 
The W Hospitality Group, a founding member of Hotel Partners Africa, specialises in the provision of advisory services to the hotel, tourism and leisure industries, providing a full range of services to clients who have investments in the sector, or who are looking to enter them through development, acquisition or other means. In sub-Saharan Africa W Hospitality Group is regarded as the market leader due to the market and financial expertise of its staff, its worldwide knowledge, and its commitment to its clients. In Africa, W Hospitality Group has to date worked in 36 countries on the continent, from its Lagos and Addis Ababa offices.
 
The Africa Hotel Investment Forum (AHIF)
 
AHIF is the premier hotel investment conference in Africa, attracting many prominent international hotel owners, investors, financiers, management companies and their advisers. It is organised by Bench Events (www.benchevents.com
http://www.benchevents.com/), which is known for producing, alongside Questex Travel + Hospitality and MEED Events, several other top-level hotel conferences around the world including Berlin (IHIF), Dubai (AHIC), Istanbul (CATHIC) and Moscow (RHIC).
 
Sponsors of AHIF 2015 are: Accor, Carlson Rezidor Hotel Group, Hilton Worldwide, Mangalis Hotel Group and Marriott International as Platinum Sponsors; Afreximbank, Areen Hospitality Design, Calibra, Colliers International, France 24, Horwath HTL, Hotel Partners Africa, HVS, Hyatt, IDC, Kempinski, KFW DEG, Mövenpick Hotels & Resorts, Onlime, Starwood Hotels and Resorts International, STR Global, SVA, The Brand Co, The Great Hospitality and Wyndham Hotel Group as Gold Sponsors.
 
Further Information
 
For further information and high resolution images, please visit http://www.africa-conference.com
http://www.africa-conference.com/ or contact:
 
- Anja Eckervogt, Tarsh Consulting, Email: Anja@tarsh.com
anja@tarsh.com, Tel: +44 (0) 3301222648, Cel: +44 (0) 7871 040 170.
 
- David Tarsh, Tarsh Consulting, Email: David@Tarsh.com
David@Tarsh.com, Tel: +44 (0) 20 7602 5262, Cel: +44 (0) 7770 816 070.
 
For the purposes of the survey, North Africa comprises Morocco, Algeria, Tunisia, Libya and Egypt