Report: Africa attracts global brands, but most money is local

Africa's hotel sector is expecting an investment increase of $2.7 billion by 2018, according to a recent report from consultancy firm JLL, and more than 42,000 new hotel rooms are expected to be built across the continent between 2014 and 2017. Sub-Saharan Africa expects an average growth of 9,000 new rooms per year, with supply expected to grow to 4 percent annually by 2017. This compares to a relative slow-down in the north, where 5,000 new rooms are anticipated between 2015 and 2017.

"The investment market in Africa is improving almost daily," David Harper, head of property services at Hotel Partners Africa, told CNN recently, noting that eight countries have seen growth of more than 6 percent in the last six years. "To set that in context, average hotel prices in Europe went up less than 1.5 percent per annum in the same period," he said.

One factor behind the surge in demand is a resurgent tourism industry, expected to increase 5.7 percent yearly between now and 2030, significantly higher than the 3.6 percent anticipated globally. This, and more diversified economies, is attracting global hotel brands, whose presence accounts for 22 percent of total rooms. Such hotels are mostly operated via franchises and management contracts with very few leases, according to JLL.

Virtual Event

Hotel Optimization Part 3 | Available On Demand

With 2020 behind us and widespread vaccine distribution on the horizon, the second half of the new year is looking up, but for Q1 (and most likely well into Q2) we’re very much still in the thick of what has undeniably been the lowest point of the pandemic. What can you be doing now to power through and set yourself up for a prosperous 2021 and beyond? Join us at Part 3 of Hotel Optimization – A Virtual Event, now available on demand, for expert panels focused on getting you back to profitability.


But, the site notes, approximately 75 percent of investment in hotel real estate in Africa currently comes from local and regional sources, among them sovereign wealth groups, particularly in the northern region.