8th Annual edition: Positioning for future growth
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 details the key trends observed and discusses the challenges facing the sector, as well as considering its future prospects.
Africa’s hotel sector has the potential for further growth over the next five years. An increase in the number of foreign and domestic travellers, as well as expansion in a number of hotel chains on the continent reinforces the hotel sector’s untapped potential for business growth.
The hotels and tourism sectors in each of the countries in our report are all showing signs of continued growth over the forecast period. Tourism remains an important part of each economy, with continued investment in each country seeing additional hotel rooms coming on line over the next five years.
"Tourism to the African continent has proven to be resilient in the face of economic and political uncertainty, impacts of droughts and other regulatory changes. The opportunities are aplenty for this industry to enjoy further growth, albeit at a more modest pace. However, we continue to see there are also a number of challenges facing each country. This is an industry that is reactive to the smallest change in political, regulatory, safety and sustainability matters.”
Hotel room revenue for the five markets as a group will increase at a 7.4% compound annual rate to R50.5 billion in 2022, from R35.2 billion in 2017.
59% of security leaders say digitisation has increased information security spending. Hotels are already in the spotlight due to high-profile breaches. The last two years have been particularly bad for the hotel industry, and trends suggest that it is unlikely to get better. Widely publicised breaches of reservation and point-of-sale systems paint a worrying picture.
Tourism is a key economic driver in the Western Cape and contributes to job creation, with around 300 000 people being employed by the industry. The hospitality industry alone contributes R40 billion to the Western Cape economy, which it simply cannot lose.
As there is little historical precedence, it is difficult to project the impact of the drought on tourism. Although bookings were down in Cape Town, overall tourism to South Africa held up during the festive season and actually picked up in the first quarter of 2018. Hotels in Cape Town are taking a number of steps to conserve water. If the winter rainfall continues at the current rate, the crisis may be limited in scope.
Positioning for future growth: PwC’s team of hotel specialists provide an unbiased overview of how the hotel industry in South Africa, Nigeria, Mauritius, Kenya and Tanzania is expected to develop over the coming years.