Bottom and top hospitality investment markets in Africa as shared by Wayne Troughton of HTI Consulting.
According to Troughton, the hospitality sector continues to attract investments from both international and African investors.
“We are tracking investment from structured funds, predominantly from Europe and the Middle East; an increasing percentage of High Net Worth Individuals from Europe, Middle East, and Africa itself), Owner-operators that invest from Europe, Africa and the USA), as well as Family Offices Middle East, the UK, Europe, and SA.”
In East Africa the top hospitality investments markets are Kampala, Addis Ababa and Dar es Salaam with Nairobi and Kigali ranked at the bottom. Nairobi ranked at the bottom for oversupply while Kigali due to oversupply and limited demand.
Troughton said Kampala is one of the next hubs for investments due to its limited branded supply and with the oil prices entering a recovery period; it is a strategic attractive opportunity for investors.
Addis Ababa is touted as an attractive market but cautioned that the market still remains challenging due to lack of forex which is resulting in developers struggling to complete their hotel developments.
He added that if a developer has the proper and adequate financing backing and a great team to complete half the development finalized then “the opportunity is there”
Dar es Salaam
The city’s performance challenges in recent years due to increased supply in the CBD node reduced levels of demand and lack of direction for policy for the private sector. The country is more optimist with the CBD is experiencing occupancy and ADR pressure.
Rwanda’s government is pro-active in attracting investments and it has high economic growth. However, Rwanda’s growth is off a low base and demand volumes for the City remain limited when compared to other East African cities.
Troughton said that if an investor is able to buy an unbranded hotel in Kigali and adequately convert into an international brand then there is upside if well located
The most attractive markets according to Troughton are Cape Verde, Senegal, Benin and Ghana while the bottom is Bamako, Niamey, Ouagadougou and Conakry.
Troughton added that other markets in West Africa also provide an opportunity but the possibility of security or political unrest can hamper performance and cash flows for long periods.