By browsing on our website, you are agreeing to our cookies policy.

 
 
Matthew Weihs Matthew Weihs

COVID-19 Threatens to Ruin a Record year for Africa’s Hotel Developers

African hotel development had returned to growth at the start of this year, 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.

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 for this year 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 this year, but we estimate that at least half of these will be delayed, bringing the actualisation rate down to no more than 40 percent.

This year African hotel chain development pipeline survey covers 35 international and regional hotel contributors across the 54 countries in north and sub-Saharan Africa, and in the Indian Ocean islands. It reveals a 3,6 percent increase on the 2019 pipeline.

Most encouraging 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.

Matthew Weihs, managing director, Bench Events, which is stages the event Africa Tomorrow, said, “Right now, we are facing the biggest recession in history. For those seeking to operate hotels, it is a dreadful time. However, for the savvy investors, this is actually a moment of opportunity because hotels are a long-term investment and one of the secrets of success is to spend money during the bottom of the economic cycle in order to capitalise on the upturn as soon as it comes. That is one reason why I expect the networking sessions at Africa Tomorrow will be very busy and fruitful.”