- Egypt and Nigeria markets remain the top targets of international hotel chains.
- New hotels’ pipeline in sub-Saharan Africa has gone up six per cent in 2022 (measured by rooms), whilst in North Africa the total has risen by four per cent.
- At the moment, the hotel chains have deals signed in 42 countries in Africa.
Africa remains a top investment destination by global hotel chains as brands pump in billions of dollars into putting up facilities in the continent, an industry survey now shows.
The African hotel chain development pipeline now totals 482 hotels with 84,427 rooms, the W-Hospitality Group report titled ‘Hotel Chain Development Pipeline Africa’, indicates.
This total was analysed initially according to two main regions, that is, North Africa where it looked at five countries – Morocco, Algeria, Tunisia, Libya, and Egypt, and sub-Saharan Africa (49 countries, including the Indian Ocean islands).
The pipeline in sub-Saharan Africa has gone by up six per cent in 2022 (measured by rooms), whilst in North Africa the total has risen by four per cent.
New global hotel chain projects underway
Digging into the data shows that, despite the 35 new projects signed in North Africa last year, the decrease in the region resulted from 16 new openings and some “cleaning-house” activity by one of the major international hotel chains.
“The two regions are, of course, very different, with just five countries in North Africa and 37 in sub-Saharan Africa. So the simple arithmetic is 35 potential new hotels per country in North Africa and just eight per country in sub-Saharan Africa,” the report released on Monday read in part.
Both regions have their “giants” – Egypt and Morocco in North Africa; Nigeria, Ethiopia, Cape Verde, South Africa and Kenya in sub-Saharan Africa. Overall, the hotel chains have deals signed in 42 countries in Africa.
West Africa leads with 13 countries, out of a total of 18, followed by the Southern and Indian Ocean sub-region where there are 11 countries with pipeline development activity.
Central Africa has seen increased activity, now with deals in five of the eight countries in the sub-region, Gabon and Chad joining the group this year.
West Africa has the main pipeline activity with 20,624 rooms (46 per cent of the regional total), followed by East Africa with 29 per cent. The six sub-Saharan African countries in the top 10 account for 54 per cent of the region’s total.
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Major hotel brands
Global brands seeking to tap or expand in the African market include Hilton with 28 upcoming hotels, and Protea Hotels (Marriott International) with 20 facilities. Four Points by Sheraton (Marriott International) has 20 hotels while Marriott Hotels and Resorts has 15. Also 15 is Radisson while DoubleTree by Hilton has 14.
Others are Novotel (Accor) 14 hotels, Hilton Garden Inn (12) Fairmont (Accor), and Mövenpick (Accor) both with 10 hotels.
“Once again, Hilton tops the list of brands by both measures (this is only hotels branded as Hilton, and doesn’t include other brands in the Hilton chain – likewise with Marriott Hotels & Resorts, this is the ranking for Marriott International’s eponymous brand,” the report noted.
Hilton has been at the top for several years, achieving a 22.6 per cent increase in signed rooms this year. The top 10 are entirely within four global hotel chains: Accor, Hilton, Marriott International, and Radisson Hotel Group.
Accor has been (prudently) cleaning out their pipeline, removing some old Swissôtel and Novotel deals, most of them in North Africa, hence the reduction in their 2023 numbers.
Fairmont was also “cleaned” a little, but Accor opened four Fairmont-branded hotels in Morocco. These two have nearly 500 rooms between them, which was 13 per cent of their 2022 pipeline for the brand.
“Accor signings in 2022 were especially highlighted by brand conversions in strategic African cities such as the iconic Cape Grace in Cape Town as well as key operating hotels in Lagos and Nairobi. This year has started with great momentum in the industry and we are thrilled to be able to offer even more conversion-friendly brands,” said Kim Irmler Development Director, sub-Saharan Africa, Accor.
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Top cities by investment
Egypt tops the continent among countries recording the highest investments from multinational hospitality brands, followed by Nigeria, Morocco, Ethiopia, and Kenya. Others are Cape Verde, Algeria, South Africa, Senegal and Côte d’Ivoire.
The report covers the 54 countries in Africa, comprising North Africa (Morocco, Algeria, Tunisia, Libya, and Egypt), sub-Saharan Africa, and the Indian Ocean islands Seychelles, Mauritius, Comoros and Madagascar. It provides consistent, reliable, and comparable data on the development pipeline activity of the hotel chains, that are operating in Africa, and those who are seeking to enter the continent for the first time.
Data on signed deals in early 2023 from 45 regional (African) and international hotel chains forms the basis of the report. Included in this report, Africa-based chains need to operate in or plan on expanding into more than one country on the continent, and the international hotel chains in more than one country globally.
The survey does not, therefore, include domestic hotel chains, that is, those operating in only one African country.
The top 10 hotel chains account for almost 80 percent of rooms scheduled to open in 2023 and 2024, and the top five for 65 per cent. Overall, the percentage of pipeline rooms to their existing footprint in Africa for the top 10 is about one-third.
Africa is seen critical for future growth
Despite the challenges of new hotel development in Africa (and globally), the quotes from the industry are uniformly positive.
“We remain optimistic about the growth of hospitality in Africa,” said Marriott International’s Karim Cheltout.
Best Western International’s Neville Graham said: “ BWH Hotel Group sees Africa as a key region of its future growth. Ascott’s Hafid Mirabti on the other hand said: “Africa holds a great potential for our growth plans.”
Not a single person mentioned the global pandemic as having any impact on their deal signing going forward. It is all very well looking at the deals signed, according to the survey, but a deal that remains just a piece of paper has little value to a hotel chain’s shareholders.
“It’s opening the hotel and generating profits is what counts, and the objective that all this activity is seeking to achieve. So as well as looking at the overall quantum of the countries’ and hotel chains’ pipelines in Africa, we look also at the status of their hotel development activity,” the report noted.
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