Covid-19 will slow hotel development in Africa, report says

The new coronavirus pandemic will slow down the development of hotels in Africa in 2020 despite the sector returning growth at the start of the year, the latest survey by W Hospitality Group indicates.

Hotel development in the region was on the rise at the beginning of the year, with more than 78,000 rooms in 408 hotels in the pipeline, according to the 12th annual survey by the Group.

 

However, the Covid-19 outbreak is now shattering the dreams of Africa’s hotel industry.

 

According to the latest data, there are 90 hotels with 17,000 rooms scheduled to open in 2020, but the Group estimates that at least half of them will be delayed, bringing the actualisation rate down to no more than 40 per cent.

 

Trevor Ward, the Managing Director of W Hospitality Group, a reputable industry firm, the pandemic has devastated the hospitality industry, possibly more so than most other economic sectors.

This is mainly because of the almost total shutdown of borders and of the aviation sector – no flights means no guests.

“We see a slowdown in pipeline growth in 2020, as we all get to grips with the new reality,” he says.

With so many of the players locked down, fewer deals will be signed, and it is inevitable that some of the planned openings in 2020 will be delayed.

This is due to closed or slower-paced construction sites, restrictions on funding and a lack of market demand.

2019 outlook

This year’s 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 per cent increase in the 2019 pipeline.

A record 68 chain hotels opened last year.

That performance was substantially up from the 39 per cent 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.

Marriott, the world’s largest hotel chain, has the largest pipeline in Africa, 22 per cent more hotels and 6 per cent more rooms than second-placed Accor.

Accor has been catching up fast, signing 25 new deals last year, compared to Marriott’s 17 new projects.

According to Ward, the growth of the chains’ presence in Africa has been a very positive story since the Group started the analysis in 2009.

“It is quite clear from the numbers that the chains, the developers, the investors – and all of us at W Hospitality Group continue to believe in the opportunities that Africa presents in the hotel and tourism industry,” he said in a statement.

jbizimungu@newtimesrwanda.com

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