INTERNATIONAL REPORT—Travel and tourism remains one of the key growth drivers of Africa’s economy, contributing 8.5% of the GDP in 2018, equivalent to $194.2 billion. According to the 2019 Jumia Hospitality Report Africa, this growth record placed the continent as the second-fastest growing tourism region in the world, with a growth rate of 5.6% after Asia-Pacific and against a 3.9% global average growth rate.
Africa received 67 million international tourist arrivals in 2018, to record a 7% increase from 63 million arrivals in 2017 and 58 million in 2016. This gradual increase is attributed to the affordability and ease of travel especially within the continent, with spending among domestic travelers accounting for 56% as compared to 44% international expenditure. Additionally, leisure travel remains an important component of Africa’s tourism industry, taking up a majority 71% of the tourist expenditure in 2018.
Jumia’s Head of Travel Estelle Verdier said that the implementation of the African Continental Free Trade Area (ACFTA) is expected to further boost domestic travel. “To realize the full potential gains will require cooperation from all industry players. Governments have to be willing to eliminate visa requirements for African nationals traveling to their countries,” Verdier said. “Ministries and other responsible partner organizations should create campaigns that will promote their local travel destinations and tourism offerings to attract more regional travelers.”
F&B strategy and design firm Keane recently released a study that forecasts that 700 new hotel restaurants and bars will be opened in Africa by 2025, in internationally branded hotels. The prediction is based on Keane’s research into 410 F&B venues across the 100 internationally branded hotels in the major 10 cities in Africa and W Hospitality Group’s authoritative hotel development pipeline report.
Stefan Breg, group strategy director of Keane, said: “Over the last 70 years, the restaurant market internationally has been built on three factors: growing towns and cities, broad distribution of income and a growing middle class. When you take into account that the anticipated rate of urbanization expected across Africa will outpace India and China in the next 25 years, Africa will become one of the world’s most vibrant dining scenes.”
And, according to STR, RevPAR has grown for 87 consecutive months amid a period of low supply growth and strong demand. Using a 12-month moving average and U.S. dollar constant currency to remove the impact of currency fluctuations, Africa’s RevPAR was up 6.4% to $67.10 as of August 2019. ADR, up 3.3%, has had more of an impact on that growth than occupancy (2.9 increase).
“Africa has shown one of the better supply and demand balances on a global level,” STR director Thomas Emanuel said at the Africa Hotel Investment Forum. “The continent’s industry continues to expand alongside rapidly developing economies and infrastructure, so there is definite investment opportunity even though finding the right opportunity is challenging. The prospects of greater supply growth as well as political and economic instability can also create difficult situations for the region’s hotel industry moving forward.”
Other highlights from Emanuel’s presentation:
- Despite its massive geographical area, Africa has just roughly 5,000 hotels. Only four countries in Africa offer more than 50,000 rooms: Egypt, Morocco, Tunisia and South Africa.
- Accor and Marriott International represent the largest inventory presence in Africa. Six years ago, there were 18 countries with no globally branded hotels. Today, there are only seven countries in that category.
- Dakar, Senegal, has seen RevPAR rise since 2017. New supply in Senegal has been more focused away from Dakar, and more toward Saly and the Blaise Diagne International Airport. Supply is however expected to ramp up in Dakar ahead of the Summer Youth Olympics in 2022.
- There is significant performance variance across Morocco, but Casablanca continues to pull down overall figures for the country.
- New supply continues to have a negative effect on performance in Nairobi, Kenya.
- Addis Ababa has seen significant demand growth thanks to more corporate business and expanded air routes.