STR Report of Africa's Hotel Industry Performance & Development

As the year 2023 approaches its end, the Africa’s hotel industry finds itself at a crossroads. The anticipation for the Africa Hospitality Investment Forum (AHIF) in Windhoek is palpable, and to bridge the gap until then, STR presents a special report on hotel performance and development in the region. This report aims to provide valuable insights and connections to navigate the complex landscape shaped by both the ongoing recovery from the pandemic and global economic challenges.

Key Data Points of STR’s Report Africa Hotel Industry

Africa’s Hotel Recovery with Global Context

The global hotel industry has witnessed a remarkable recovery, with most regions surpassing pre-pandemic revenue per available room (RevPAR) levels. However, Africa’s hotel industry performance is influenced by diverse factors, with occupancy lagging in the north. Average daily rate (ADR) variations across the continent are attributed to inflation, and notable events, such as the Africa Union meeting and FIFA Congress, have impacted metrics.

Africa’s Hotel Industry: Country-Level Performance

Examining individual African countries, key performers include:

Egypt and Ghana: Demonstrating substantial (85.5% and 66.6%) YoY growth in ADR, showcasing their potential in the hospitality sector.
Namibia: Leading with a remarkable 40.2% YoY increase in occupancy during Q3 2023.

Market-Level Recovery

Diverse markets exhibit varying levels of recovery, with Casablanca, Marrakech, and Constantine showcasing strong performance. Windhoek, following a global trend, sees occupancy trailing pre-pandemic levels but with solid ADR growth, particularly in August.

Market Indices (2023 YTD, local currency):

Windhoek: Ahead of the Curve

Windhoek’s monthly metrics reveal a normalization of growth rates, with RevPAR indexing at 122 of 2019 levels in August, a notable 22 percentage points increase.

Leisure Seasonality Returns

Safari lodges in the Masai Mara/Serengeti market illustrate the return of seasonality, with a spike in occupancy during the travel season in Q2.

Masai Mara/Serengeti Safari Lodges (Monthly OCC & ADR, USD):

2019: OCC 50, ADR $200
2023: OCC 100, ADR $350

Inflation Impact in Egypt and Ghana

Inflation contributes to higher room rates, with Egypt and Ghana experiencing significant ADR growth, reflecting the global trend.

ADR Impact (Rolling 28-Day Average Indexed to 2019):

Egypt: 85.5%
Ghana: 66.6%

Development

Development is on the rise in Africa hotel industry, with markets like Cairo and Addis Ababa projecting substantial growth. The top brands in Africa’s existing supply and pipeline development include Jaz, Radisson Blu, Hilton, Protea Hotel, and Southern Sun.

Pipeline Development (September 2023):

Cairo: Projected 48% growth
Addis Ababa: Projected 71% growth

Conclusion

As Africa’s hotel industry undergoes recovery amidst global challenges, this special report by STR provides a comprehensive overview of key performance indicators and development trends. Insights from this report are crucial for industry leaders looking to capitalize on shifting opportunities in the market. The stage is set for the Africa Hospitality Investment Forum in June 2024, where stakeholders will converge to shape the future of tourism, infrastructure, and development across the continent.

Visit AHIF website to read the complete report.