Africa is still the “Go To” Place for Hotel Investors

Press Release

South Africa, Pretoria, 29 September 2014: “Africa remains the ‘go to’ place in the world, in as far as hotel investment and growth is concerned – and it will be for some time to come” says one of South Africa’s leading economists and Chief Economist for Investment Solutions, Chris Hart.

Addressing delegates at the recent Hotel Investment Conference Africa (HICA), which was held in Johannesburg, South Africa, from 14^th to 16^th September, Hart touched on the contentious issue of South Africa’s new immigration regulations and said it was critical for Governments to remove obstacles which serve as barriers to investment. In addition, he urged for a greater level of tourism cooperation between countries to link and package the Continent’s most iconic and unique tourism opportunities.”

This year’s conference brought together key decision-makers in the travel and hospitality sector, which included regional and international hoteliers, investors, developers and senior public sector leaders. Highly regarded as Africa’s premier hotel investment platform, the conference continues to be an important meeting place where industry movers and shakers can network, promote hotel projects and engage on matters pertaining to hotel development in the Sub Saharan Africa (SSA) region.

Hart’s presentation on Sub Saharan Africa’s Economic Outlook was one of two sessions dedicated to discussing the state of Africa’s economy, exploring the Continent’s current and future economic prospects in view of its burgeoning hospitality industry. Another session, titled the World and Sub Saharan Africa in 2014, provided a detailed review of the SSA region’s hotel performance in comparison to other parts of the world.

Notable highlights from the two sessions

• West Africa leads the hotel development pipeline with about 87 hotels planned. A total of 51% of these hotels are in preplanning, whilst 49% are in construction. 40 of the hotels planned in this region will be in Nigeria; East Africa comes a close second with 33 hotels planned and Tanzania leading hotel development pipeline and in Southern Africa, South Africa has a total of 9 hotels in the pipeline;.
• African cities which have been performing well in terms of occupancies and increasing average daily rates (AVR) include Accra, Abuja. Addis Ababa, Cape Town and Windhoek;
• Resources and ICT sectors are fuelling hospitality investment drive in the Continent;
• From a funding and capital sourcing perspective, a more knowledgeable, more experienced hotel owner class was beginning to emerge, which will have a greater influence on the future growth and sustainability of the sector

Africa must tell its own story

Despite the UNWTO’s projections that international arrivals into Africa would reach 134 billion by 2020, the conference acknowledged that Africa still had the lowest international arrival receipts when compared with other regions. In addition, delegates noted that more needed to be done to encourage intra-continental and domestic travel. “Pricing is not the problem but rather it is more about our understanding of the Continent and what it has to offer. In general, we don’t look at the Continent as a worthy holiday destination because the media we consume does not tell us enough Africa”, said Author and Africa Business Specialist , Victor Kgomoeswana. He said it was time for Africa to tell its own story.

Ebola, acts of terrorism on the hospitality industry  

Another critical aspects in the discussion centred on the impact of disease such as the Ebola epidemic and acts of terrorism in certain parts of the Continent. Operators whose hotels are based in countries affected by the Ebola outbreak have acknowledged that the virus has slowed down traffic but are optimistic of a rebound. Noting the difficulties of dealing with dynamics in the political and social environment, investors and hoteliers remain bullish about the sector’s prospects for both business and leisure tourism in the medium to long-term.

Visit www.hica.co.za for more details about the conference proceedings or follow @hica07 using #hica2014. HICA 2015 is scheduled to take place from 07 to 09 September 2015.