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COVID-19 threatens record year for Africa’s hotel developers

African hotel development had returned to growth at the start of 2020, with more than 78,000 rooms in 408 hotels in the pipeline, according to the 12th annual survey by W Hospitality Group, acknowledged as the industry’s most authoritative source.

However, the COVID-19 outbreak is now shattering the dreams of Africa’s hotel industry.

According to Trevor Ward, managing director, W Hospitality Group, “The growth of the chains’ presence in Africa has been a very positive story since we started this analysis in 2009. It is quite clear from the numbers that the chains, the developers, the investors – and all of us at W Hospitality Group – continue to believe in the opportunities that Africa presents in the hotel and tourism industry. However, our industry has been devastated by the impact of COVID-19, possibly more so than most other economic sectors, mainly because of the almost total shutdown of borders and of the aviation sector – no flights means no guests.”

Read also: Covid-19 shatters growth in African hotel development, says MD W Hospitality Group

Wards foresees slowdown in growth. “With that background, we see a slowdown in pipeline growth in 2020, as we all get to grips with the new reality. With so many of the players locked down, fewer deals will be signed, and it is inevitable that some of the planned openings in 2020 will be delayed, due to closed or slower-paced construction sites, restrictions on funding and a lack of market demand. According to our latest data, there are 90 hotels with 17,000 rooms scheduled to open in 2020, but we estimate that at least half of these will be delayed, bringing the actualisation rate down to no more than 40 percent”, he says.

This year’s African Hotel Chain Development Pipeline survey covers 35 international and regional hotel contributors across the 54 countries in north and subSaharan Africa, and in the Indian Ocean islands. It reveals a 3.6 percent increase on the 2019 pipeline. Most encouraging, according to the survey, was a record 68 chain hotels opening last year, fully 75 percent of those, which were scheduled to open, with 11,000 rooms. That performance was substantially up from the 39 percent of those scheduled to open in 2018 actually doing so.

Accor performed particularly well; it opened 18 hotels last year with almost 3,500 rooms in its various brands, ranging from Ibis to Fairmont.

As expected, Marriott, the world’s largest hotel chain, has the largest pipeline in Africa, 22 percent more hotels and 6 percent more rooms than second-placed Accor, but Accor has been catching up fast, signing 25 new deals last year, compared to Marriott’s 17 new projects.

Speaking on the expectations for the second half of the year, Trevor Ward says,“we have to wait and see what will happen in the second half of 2020, and in 2021, as we emerge from lockdown and other restrictions.

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