More than 40,000 new rooms across 207 hotels are currently being built by African hotel developers, according to estimates by a hospitality consultancy.
And while much of the hospitality development in Africa was previously concentrated in the five North African countries of Egypt, Morocco, Algeria, Tunisia and Libya, the tide has turned and many of the new projects are now focused on Sub-Saharan Africa, according to W Hospitality Group, based in Lagos, Nigeria.
"As in previous years, the detail behind the headline shows a distinct tale of two Africas," said the consultancy in its latest forecast published in March.
"In North Africa, the development pipeline grew by 9% in 2013. In Sub-Saharan Africa, however, the increase was a massive 23%. This compares to 4% growth in Europe and 8.6% growth in Asia Pacific, according to pipeline data produced by STR Global (although the growth in Africa is from a much lower base)."
Nearly a fifth, or 49, of the hotels are currently being built in Nigeria, with a total of 7,470 rooms, according to W Consultancy's data.
However, Egypt continues to reign supreme as the continent's biggest hospitality investment magnet, with 7,644 rooms spread over 20 hotels.
Egypt's hotel pipeline is impressive given the political upheavals it has faced over the past three years and suggests that investors continue to have faith in the long-term potential of the country, given its unique archaeological riches.
Still, the North African region is expected to see a slowdown as a number of planned projects were launched last year and new announcements are few and far between.
"Accor alone opened eight hotels with 1,153 rooms in Algeria, Morocco and Tunisia), and the political turmoil in the region has had a negative effect on new investment and, therefore, new deals," said W Hospitality managing director Trevor J. Ward in the report that he co-wrote with consultant Damilola Adepoju. "Several hotels which are in the pipeline have effectively been suspended, pending a return to sustained normality."
While North Africa sees hotel investment activity dwindle, southern states like Kenya and Gabon are emerging as new tourism stars.
Nairobi is the focus of attention in Kenya, with seven companies entering the market there - Best Western, Country Lodge, Accor (Novotel and Ibis), Carlson Rezidor (Radisson Blu and Park Inn), Dusit, easyHotel and Kempinski.
"With almost 1,500 rooms between them, of which almost 700 are due to open in 2013, is an oversupply situation looming?" noted the consultancy.
Buoyant tourism sector
Africa saw a 6% rise in tourism numbers last year, which was seen as a spirited recovery as 2011 figures saw a 1% dip due to the Arab Spring revolution that gripped much of North Africa.
"Arrivals reached a new record (52 million) due to the rebound in North Africa (+9% as compared to a 9% decline in 2011) and to the continued growth of Sub-Saharan destinations (+5%)," said the World Tourism Organization.
Sub-Saharan Africa saw growth of 5% last year, with nearly 34 million tourists. That is forecast to grow further as a number of African countries improve their business infrastructure and spruce up their tourism offerings.
Blistering growth in many of the Sub-Saharan African states and rising interest is encouraging international hotel groups to bring a variety of their brands to suit the taste of investors.
The flow of foreign direct investment from emerging markets is no longer concentrated in the oil and gas or mining sector, but is actively being deployed in telecom, infrastructure and hospitality to promote Africa's natural beauty to a greater audience.
"We see that improving, as more sophisticated investors, including specialist funds, enter the market, capable of running a successful development project," the consultancy noted.
"We have identified five hotel funds currently active in Africa, with others being established, seeking acquisition and new-build opportunities. In addition, several international construction companies, from Europe, the Middle East and elsewhere, are eying the market, bringing construction finance with them."
Growth is going to be especially significant in established tourism destinations like South Africa, according to management consultancy PricewaterhouseCoopers (PwC).
"The total number of travellers in South Africa will rise to 16.85 million by 2016, a 4.1% compound annual increase from 2011. Growth in travel and tourism will fuel growth in the accommodation industry during the next five years," the consultancy forecast in a report published last year.
PwC expects hotel rooms to rise 1.1% each year till 2016 while average room rates are also expected to rise nearly 5% annually.
While there is much talk of Chinese and Indian hotel chains coming to Africa, for now established Western hotel chains dominate the landscape.
Hilton is set to operate most hotels (17) and hotel rooms (5,400) in the continent, followed by Radisson (17 hotels, and 4,191 rooms).
© alifarabia.com 2013
