Hospitality outlook: 2017-2021

7th Annual edition: African Insights

The outlook provides an overview of how the hotel industry in South Africa, Nigeria, Mauritius, Kenya and Tanzania is expected to develop over the coming years. It also details the key trends observed and discusses the challenges facing the sector as well as it's future prospects.

 

Overview

The tourism industry continues to be one of the fastest-growing and most vibrant sectors of Africa’s economy. In spite of recent challenges, including the fall in oil prices, change in visa regulations in South Africa and contraction of the global economy, the sector has significant potential to create jobs, uplift inclusive economic growth across the continent, and reduce poverty.

Africa is steadily developing into one of the world’s great regions for travel. With its exceptional, unfiltered fusion of breath taking, life-inspiring offerings – history & heritage, culture & tradition, wildlife, natural beauty, and most importantly, the innate spirit of the continent’s people – Africa never fails to create an imprint on the minds and hearts of travellers from across the globe.

 

Looking ahead – Revenue growth

The revenue for the five markets as a group will increase at an 8.7% compound annual rate to R59.2 billion in 2021 from R39 billion in 2016.

 

Emerging markets: Ghana and Ethiopia

We take a closer look at two emerging hotel markets, Ghana and Ethiopia. These two markets have seen an increase in international tourism over the past decade.


Increased revenue numbers, despite challenges for the industry

Overall room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 12.2% in 2016, the biggest increase since 2013. Mauritius and South Africa had the largest gains at 15.3% and 12.2%, respectively, each benefiting from double-digit growth in foreign overnight visitors. Hotel room revenue growth was also seen in Nigeria, Kenya and Tanzania.

Room for growth

Africa is steadily developing into one of the world’s great regions for travel. Even though there are challenges faced by each country due to global and local economic and political pressures, the outlook remains positive. It’s promising to see a growing number of new hotels planned for the South African market over the next five years. With Kenya’s flourishing economy, a total of 13 new hotels are expected to open by 2021. Additional hotel room capacity will also be added to Nigeria, Mauritius and Tanzania, with Nigeria forecast to experience the largest growth in hotel rooms over the 2017 – 2021 forecast period. The emergence of peer-to-peer inventory from entities such as Airbnb, has facilitated growth in non-hotel accommodation and competition for travellers

Brighter travel prospects

South Africa enjoyed an excellent past year. Foreign tourism rebounded in 2016 with a 12.8% increase in the number of foreign overnight visitors to South Africa more than recovering from the 6.8% decline in 2015. We project the number of foreign overnight visitors to South Africa to increase an additional 5.6% in 2017. The number of tourist arrivals to Mauritius increased by 10.8% in 2016, matching the gain in 2015 and significantly exceeding growth rates over the 2010-14 period. Kenya also experienced an increase in visitor numbers.

Contact us

Pietro Calicchio
Partner
Tel: +27 (0)11 797 5292
Email

Basheena Bhoola
Senior Manager
Tel: +27 (0)11 797 5687
Email

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