Africa hotel pipeline expanded over 9% in 2023, largest jump since 2018

Over the past two decades, Africa has experienced rapid growth in its tourism industry, leading to a substantial development of hotels and resorts across the region. According to the latest Africa Hotel Pipeline report, there are 524 hotels with over 90,000 rooms in the pipeline, marking the largest jump since 2018. To delve deeper into this promising trend, CNBC Africa interviewed Trevor Ward, Managing Director of W Hospitality Group, to discuss the key findings of the report. Ward shared that the 16th edition of the report revealed a record number of 524 hotels in the pipeline. These are signed agreements between hotel chains and owners or developers, spanning across 41 out of the 54 African countries. The report also highlighted that approximately 140 of these hotels are set to open this year, which is expected to generate employment opportunities and boost local economies. The report further indicated that hotel development activity in Sub-Saharan Africa has grown by 9%, while North Africa has seen a growth of 9.4%. Ward attributed this growth to increased investment flowing into different parts of the continent. He specifically noted that Angola, due to improvements in the ease of doing business and the recent visa-free policy, has experienced heightened activity, despite Southern Africa having a relatively lower share of the total investments. Moreover, North African countries like Morocco and Egypt have empowered their governments to enhance tourism infrastructure, driving the development of new hotels and resorts. In East Africa, Tanzania's favorable business environment and focus on tourism have resulted in a doubled pipeline in popular destinations like Zanzibar. Investor confidence in resorts as essential assets has also risen post-pandemic, leading to a surge in development activities. While Africa's expanding hotel chain signifies growth and potential, concerns around economic and political instability impacting tourism remain prevalent. Ward emphasized the importance of stability to attract and sustain investments. He highlighted how countries with stable political landscapes are witnessing increased development activities, showcasing the correlation between stability and growth in the tourism sector. Egypt emerged as a key player in the hotel industry, with a significant number of projects taking place in the country. Ward explained that Egypt's strategic location, diverse tourism assets, historical sites, and government support are key factors driving its growth. Major developments along the Mediterranean coast and the Red Sea coast, particularly in Sharm el-Sheikh, have positioned Egypt as a leading destination for hotel investments. In conclusion, Africa's hospitality sector is on a robust trajectory, with the continent poised for substantial growth in the tourism industry. The surge in hotel development projects, driven by investments and government support, paints a promising picture for job creation and economic prosperity across the region.