Market News
Africa Seen as Growing Hot Spot for $3,000-a-Night Hotel Rooms - BLOOMBERG
BY , Bloomberg News
, Source: W Hospitality Group
(Bloomberg) -- Major hotel chains including Marriott International Inc. and Hilton Worldwide Holdings Inc. are on track to more than double their footprint across Africa in the coming years as the continent sees a boom in tourism.
Marriott, which last year opened the JW Marriott Masai Mara Lodge in Kenya with rooms averaging more than $3,000 a night, has more than 138 hotels under development in Africa, while Hilton has 72 properties in the pipeline, according to a report by W Hospitality Group. Hyatt Hotels Corp. is planning to add another 11 locations across the continent, the report shows.
In all, the Lagos, Nigeria-based travel specialist found that the total number of hotel rooms operated by major chains on the continent is expected to soar 75% to 175,346 in the coming years. More than three-quarters of the properties are expected to be upscale, upper upscale or luxury locations.
“There an enormous concentration of new hotels and resorts in the luxury and upper upscale level and hardly anything at the economy and midscale,” Trevor Ward, managing director of W Hospitality Group, said in an interview. “I hope that will come.”
Recent additions to the hotel scene in Africa include Nobu Hotels, which made its debut on the continent last year with an outpost in Marrakesh. Meliá Hotels International SA also opened Ngorongoro Lodge in Tanzania, where a stay can typically be booked for more than $1,100 per day.
Countries across Africa are poised to benefit as tourism to the continent surges in the aftermath of the coronavirus pandemic. Google searches for African safaris, for instance, more than doubled in the first three months of 2023 compared with the same period a year earlier, according to the travel specialist Go2Africa. In Uganda, visitor arrivals last year jumped 57% in 2023, driving earnings to $985 million, according to the tourism ministry. Revenue is expected to surpass 2019 levels this year.
Still, the continent makes up a very small share of the global hotel industry. Hilton, for instance, last year opened almost 400 properties. Just two of those were in Africa. And out of the 560 new locations that Marriott opened in 2023, only four were on the continent, W Hospitality Group’s report found.
Of the 524 properties that hoteliers are currently planning to open across Africa, more than one-quarter are expected to begin taking visitors this year, Ward said. The remaining locations are expected to debut in the next six years, he said.
“It has been very difficult to raise finance for hotels globally, and then when you put in the Africa factor, it gets more difficult,” Ward said. “The costs are just ballooning and when the price goes up while you are under construction, it gets very difficult to bridge that financing gap.”
--With assistance from Fred Ojambo.
(Updates with tourism data from Uganda in sixth paragraph.)
