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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 hotel sector in terms of business growth.
Here are some of the highlights of a report released today. by PwC on the Hotel Industry in Africa
The eighth edition of the PwC Hotel Outlook: 2018-2022 includes information on accommodation in South Africa, Nigeria, in Mauritius, Kenya and Tanzania. The report predicts that hotel room receipts for the five markets will grow at a compound annual rate of 7.4% to 50.5 billion rand in 2022 versus 35.2 billion rand in 2017.
Pietro Calicchio, head of the hospitality sector, PwC Southern Africa says: "Tourism on the African continent has proved resilient in the face of economic and political uncertainty, the impacts 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 forecast in our 2017 Hotel Outlook with an additional 2,900 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 by 2022, an annual increase of 4% from 16 million in 2017. "There is also a continuing debate on further easing visa requirements for international visitors, which could impact our growth forecasts ".
In 2016, visitors from China to South Africa dropped by 17% in 2017. Indian travelers recorded a modest growth of 2.7% in 2017, well below the 21.7% increase recorded in 2016. Among non-African countries, the United Kingdom remains the main source of South Africa with 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 While tourism fundamentals in South Africa remain favorable, favored by the improvement of the economy. global and local, other factors such as the water shortage in Cape Town affect it. 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: South Africa – Nigeria – Mauritius – Kenya – Tanzania
Overall, the hotel room business figure in South Africa increased by 4.6%. In 2017, five-star hotels recorded 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 income of hotel rooms is expected to increase at an annual compound rate of 7.2% until 2022.
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