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The hospitality sector in Africa has the potential to continue growing over the next five years. The increase in the number of foreign and domestic travelers as well as the expansion of several hotel chains on the continent reinforce the untapped potential of the hospitality sector for business growth.
Here are some of the highlights of a report published today: The Hotel Industry in Africa
The Eighth Edition of PwC's Prospects: 2018- 2022 contains information on accommodation in South Africa, Nigeria, Mauritius, Kenya and Tanzania. The report predicts that hotel room receipts for the five markets as a group will grow at a compound annual rate of 7.4%, from 35.2 billion rand in 2017 to 50.5 billion rand. in 2022.
The African continent has shown resilience in the face of economic and political uncertainty, the effects of drought and other regulatory changes. There are many opportunities for this industry to continue to grow, albeit at a more modest pace. However, as we continue to see, there are also a number of challenges for each country. It is an industry that responds to the slightest change in policy, regulation, security and sustainability.
The business figure of South African hotel rooms is expected to reach 21.8 billion rand in 2022, up 5.6 percent year-on-year. 16.6 billion rand in 2017. The growth of hotel rooms in South Africa remains similar to that expected in our hotels Outlook with 2,900 additional rooms to be added over the next five years . We also expect that occupancy rates will continue to grow over the forecast period and reach 62.5% in 2022.
The number of international visitors to South Africa continued to grow with an overall increase 2.4%. The outlook for 2018 remains positive but at lower percentages than in 2016. The report predicts that the number of foreign visitors and domestic tourism will increase by 5.3% in 2018. The total number of travelers in South Africa is expected to reach 19.5 million in 2022, an annual increase of 4% from 16 million in 2017. "There is also a debate on further easing visa requirements for international visitors and this could have an impact on our projected growth "
In 2017, Indian travelers registered a modest 2.7% growth in 2017, well below the 21.7% increase recorded in 2016. Among non-African countries, the United Kingdom remains the largest main source of visitors to South Africa. 447,901 in 2017, contributing to overall growth of 7.2% of visitors from non-African countries in 2017. Among African visitors, the largest number came from Zimbabwe at 2 million, followed by Lesotho at 1.8 million and the Mozam Although the fundamental factors affecting tourism in South Africa remain favorable, favored by the improvement of the global and local economy, they are influenced by other factors, such as the shortage of water in Cape Town. As there are few historical precedents, it is difficult to project the impact of the drought on tourism. Although bookings dropped in Cape Town, overall tourism in South Africa held up during the holiday season and even resumed in the first quarter of 2018. Cape Town hotels take a number of steps to conserve water . If winter precipitation continues at the current rate, the scope of the crisis may be limited.
Nigeria is expected to be the fastest growing country in the next five years. A number of new hotels must be open during this period. Continued improvement in the domestic economy will also lead to faster growth in overnight stays
Kenya, Tanzania and Mauritius are expected to be the next to grow the fastest, with annual increases of 9.6% , 9.1% and 7.2% respectively. South Africa is expected to be the slowest market with an annual compound increase of 5.6% of room income
Accommodation: South Africa – Nigeria – Mauritius – Kenya – Tanzania [19459015
The turnover in South Africa rose 4.6% to 16.6 billion rand in 2017. Five-star hotels posted the highest occupancy rates in the market in 2017, with 79.5%. While average daily rate growth (ADR) for five-star hotels slowed in 2017 (R2.6 million), as for the overall market, the 8.8% increase was still well above up for the three and four star hotels, reflecting the impact of the high occupancy rate of five-star hotels
With the opening of several four-star hotels in 2017, the available rooms have increased 1.8%, the first increase since 2013. Most planned hotel openings for the coming years, four-star hotels will result in a projected annual increase of 2.4% of the four-star rooms available over the next few years. next five years – 76% of the total increase in rooms available for all hotels in South Africa. The three-star hotels account for 31% of total hotel room business in 2017.
The hotel markets of Nigeria and Mauritius continued to perform well in 2017 with a double-digit growth. For the entire forecast period, the number of rooms available in Nigeria will increase from 9,700 in 2017 to 12,600 in 2022, representing a cumulative annual increase of 5.4%, the largest expansion ever recorded in the United States. the country.
The room income in Mauritius has increased by 12.7% in 2017 and the country continues to experience a growth in the number of foreign visitors. The annual revenue of hotel rooms is expected to increase at an annual compound rate of 7.2% until 2022.
Kenya experienced a drop in visitors after the August 2017 national elections but a recovery has already been observed in December with an increase in the number of visitors to 9.9% overall growth. However, this was not enough to increase overall room revenues, which decreased by 13.5% in 2017. Tourism in Kenya is expected to grow at a compound annual rate of 6.9%, from 1, 47 million in 2017 to 2.06 million in 2022
The turnover of Tanzanian hotel rooms rose to 206 million US dollars in 2017, down 5.5 % compared to 2016 due to a decrease in overnight stays. However, we expect overnight stays to increase in 2018 and revenue growth to be 10.2% by 2018.
The hospitality and tourism sectors in each of the countries in our report are showing signs of continuous growth over the forecast period. Tourism remains an important part of every economy. However, the slightest change or disruption can have a fundamental impact on the future growth of each market. "It is therefore important that investors, hoteliers, tourism organizations and governments continue to work together to develop this important industry and ensure its sustainability so that all stakeholders can reap the maximum benefit," concludes Calicchio .
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