Africa’s Hotel and Hospitality Sector Growth to Boom in 2023

hotel and hospitality

SUMMARY – OPTIMISM AND GROWTH: AFRICAN HOTEL & HOSPITALITY INDUSTRY POSITIVE ABOUT FUTURE, EMBRACES SUSTAINABILITY AND TECHNOLOGY. TRENDS INCLUDE SUSTAINABLE TOURISM, NATURE-BOUND GETAWAYS, AND DIGITAL INNOVATIONS.

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In 2023, African Hotel and Hospitality Industry Confidence Index conducted a survey to gather information on the trends, challenges, and perceptions of the hotel and hospitality market in 17 African countries. The results showed that the overall sentiment is positive, with participants expressing optimism about the future of the sector.

According to Evan Schiff, portfolio director at dmg events, the survey depicts a predominantly positive sector that is actively seeking fresh avenues for traveler engagement and innovative approaches to enhancing traveler experiences.

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Despite the sector’s challenges, nearly 82% of respondents expressed positivity regarding the next six months, while 90% maintained a positive outlook for the sector over the next one to two years.

Potential for Growth in the African Hotel and Hospitality Industry

Respondents highlighted the potential for increased investment to bolster growth in the industry and effectively leverage its potential. Statista predicts that the hotel market revenue volume in Africa will reach US$13.80 billion by 2027. This implies an expected average annual revenue growth rate of 8.68% between 2023 and 2027.

Notably, African hotel and hospitality industry recovery rate in international tourism outpaced the global average, with North Africa leading the way at -29% growth. This marked a significant improvement from the -73% experienced globally during the pandemic. While Sub-Saharan Africa lagged behind its pre-pandemic key performance indicators by 43%, the region is currently in the process of recovery, presenting vast opportunities for hotel and hospitality operators.

READ: African Hospitality Industry Recovers from Covid-19

Key Travel and Tourism Trends for the Year

Several key trends emerged in travel and tourism in 2022:

  • Environmental, Social, and Governance (ESG) considerations: Travelers are increasingly seeking sustainable tourism options and are mindful of the energy costs associated with their vacations.
  • Nature-bound getaways or ‘staycations’: These experiences gained popularity as people sought to connect with the environment.
  • Medical tourism: Post-pandemic risk factors influenced how some individuals chose to travel, particularly in pursuit of wellness.
  • The GOAT and growth trend: Research from Expedia revealed that 2022 became the year of the GOAT (Greatest of All Trips) as travelers embraced the ‘carpe diem’ mindset and embarked on bucket-list travel and new experiences.
  • Automation and intelligent technology: These advancements are reshaping the African hotel and hospitality industry, enabling cost-cutting measures while providing exceptional service.

Continued Hospitality Trends

Digital check-ins, QR code menus, and interactive customer engagement apps are among the trends that will persist in the hospitality industry. Evan Schiff states that these advancements, once considered optional, have now become essential pathways to customer interaction and engagement, representing one of the most exciting developments in the African hotel and hospitality industry.

Securing skilled staff remains a significant challenge for the hospitality sector. Márton Takács, global sector leader: hotel and leisure at Moore Global, highlights this issue. Additionally, rising energy costs, construction expenses, inflationary pressures, and their impact on travelers’ discretionary income have heavily burdened the industry.

While COVID-19 continues to pose ongoing risks to the sector, occupancy rates still remain below pre-pandemic levels. Nevertheless, there is a determined commitment to not only maintain employment but also to persevere, innovate, and retain talent within the sector. A significant 94.3% of respondents clearly expressed their dedication to supporting employees.

Hotel & Hospitality Show Promotes Collaboration

African Hotel & Hospitality Show, organized by dmg events, will be held from May 18 to 20, 2023, in Johannesburg. Celebrating its sixth year, the event aims to connect brands with hospitality buyers in Africa. The show facilitates business-to-business matchmaking services, offers masterclasses, encourages networking, and fosters meaningful cross-border collaborations. In 2022, representatives from 67 countries participated in the three African Trade Week events, creating opportunities for local sellers to engage with international buyers.

 

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