African pipeline hotels record 148% growth in 10 years

The African hospitality landscape has continued to show resilience, recording a growth of 148 percent of pipeline hotels in the last 10 years.

From barely 144 hotels, representing almost 30,000 rooms in 2009, the African pipeline hotel has grown to 76,322 rooms in 418 hotels across different brands today.

According to the 2018 Report of the annual Hotel Chain Development Pipelines in Africa by W Hospitality, the growth is as a result of Africa having continued to present considerable opportunities for discerning global investors as six of the world’s fastest growing economies in 2018 are in Africa, three of which are ranked among the Top 10 Countries by Number of Rooms and Pipeline status in the report.

According to the 2018 edition of the annual report, which is now in its 10th year, 97 new hotel deals have been signed since the beginning of 2017 till date, representing a slight improvement on the 86 hotels deals signed in 2016. The report attributed the improvement to the macroeconomic adjustments necessitated by low oil price and other commodities and the resultant cutbacks in government expenditure across Africa in 2017.

The 2018 Report of the annual Hotel Chain Development Pipelines in Africa, which has become an authoritative source on hotel growth and development in Africa, recorded an overall 14 percent growth in 2018 with Egypt displacing Nigeria as leader in the Top 10 Countries by Number of Rooms. Though with 54 hotels, Egypt led with 13, 636 rooms of 317 average size, while Nigeria trailed behind with 9,603 rooms despite her 57 pipeline hotels.

As well, Cairo beat Lagos in the Top 10 Cities by Number of Planned Rooms with 6,478 rooms while Lagos trailed behind Addis Ababa’s 4,907 with 4,135 planned rooms in 2018.

According to the report, over 2000 new rooms were signed in Egypt in 2017 led by Hilton Worldwide and InterContinental Hotel Group. The surprise, according to the report,  was Ethiopia, which made the third position on the list with massive increase in pipeline deals, up from 20 in 2017 to 31 hotels in 2018 signed by international chains such as Accor Hotels, Hilton and regional chains like aha and Latitude.

More also, South Africa, which singed 2,005 new hotels in 11 brands in the build up to the 2010 World Cup, is in the fourth place with 37 new signings in 2018, representing 12 percent up  on 2017 signings.

By region, North Africa had an impressive signing with four out of five countries in the region in the Top 10 Countries by Number of Planned Rooms.

The brands also put up impressive performances as Marriot International led the Top 10 Chains by number of planned hotels with 93 hotels and in the Top 10 Chain by number of planned rooms with 17,708 rooms. But in 2009, Accor Hotel led the Top 10 Chain by number of rooms with 4, 640 rooms across 28 hotels.  In the Hotel Openings 2017 category, Deutsche Hospitality led with four already opened hotels offering 1,845 rooms. But in the Pipeline versus Existing Hotels in Africa, Marriott International led with 93 pipeline and 100 existing hotels.

Speaking on the report, Trevor Ward, CEO, W Hospitality, noted that the survey, which was first produced in 2009, witnessed 41 international and regional contributors, reporting pipeline activity of over 76,000 rooms in 418 hotels, presenting a 14 percent increase on the 2017 pipeline.

“We first produced the survey in 2009 with contributions from 19 international and regional hotel chains, who reported between them a pipeline of 144 hotels and almost 30,000 rooms. Our annual report on hotel development activity in Africa has become acknowledged as the most authoritative source on the growth of the hotel industry in Africa. And we are equally delighted to be closely involved in this African hotel success story – as well as, the research work we undertake, we have provided professional advice on a number of the deals included in the pipeline reports”, Ward said.

 In his expectation for 2018, the W Hospitality CEO noted that the growth trend in hotel development activities in Africa will continue in 2018 as economies hit by election and recent financial crisis work towards recovery and economic diversification. As well, more intra-Africa travel will stimulate tourism demand, which will drive demand for hotels and in anticipation of this, hotel chains are focusing on building long-term relationships with investors.