PriceWaterhouseCoopers (PwC), the world’s leading consultancy and research firm, has projected that Nigeria’s hotel sector held the best prospect of growth in Africa over the next five years.
The firm, in its eighth edition of the Hotels Outlook: 2018-2022 reported that Africa’s hotel sector had the potential for further growth over the next five years.
PwC based its projection on expected increase in the number of foreign and domestic travellers, as well as an expansion in a number of hotel chains on the continent which reinforces the hotel sector’s untapped potential for business growth.
According to a release distributed by African Press Organisation (APO) Group on the report, indicated that it covered information about hotel accommodation in South Africa, Nigeria, Mauritius, Kenya and Tanzania.
The firm projected that hotel room revenue for the five markets as a group would increase at a 7.4% compound annual rate to R50.5 billion in 2022 from R.35.2 billion in 2017.
Specifically, PwC projected that Nigeria’s hotel sector was expected to be the fastest-growing over the next five years based on the number of new hotels that are scheduled to be opened during this time.
In addition to the increase in number of hotels, the consultancy and research outfit also linked continued improvement in the domestic economy to the projected faster growth in guest nights.
Others it reported in the order of growth rates are, Kenya, Tanzania and Mauritius, with compound annual increases of 9.6 percent, 9.1 percent and 7.2 percent, respectively during the five-year period.
However, the report forecasts that South Africa will be the slowest growing market with a 5.6 percent compound annual increase in room revenue.
Commenting on the research findings, Hospitality Industry Leader, PwC Southern Africa, Pietro Calicchio, said: “Tourism to the African continent has proven to be resilient in the face of economic and political uncertainty, impacts of droughts and other regulatory changes.
“The opportunities are aplenty for this industry to enjoy further growth albeit at a more modest pace. However, as we continue to see there are also a number of challenges facing each country. This is an industry that is reactive to the smallest change in political, regulatory, safety and sustainability matters”, he added.The report stated further: “The hotel markets in Nigeria and Mauritius continued to perform well in 2017 with both achieving double-digit growth whereas Kenya and Tanzania had decreases in room revenue.
“For the forecast period as a whole, the number of available rooms in Nigeria will rise from 9,700 in 2017 to 12,600 in 2022, a 5.4% compound annual increase – still the largest expansion of any country in the report.
“Hotel room revenue in Mauritius increased by 12.7% in 2017 and the country continues to experience growth in the number of foreign visitors. Hotel room revenue is projected to grow at a 7.2% compound annual rate to 2022.
“Kenya experienced a drop in visitors following the national elections in August 2017 but recovery was already seen in December with an increase in visitor numbers resulting in 9.9% overall growth. However, this was not enough to boost overall room revenue, which showed a 13.5% decline in 2017. Going forward, tourism in Kenya is expected to increase at a 6.9% compound annual rate, rising to 2.06 million in 2022 from 1.47 million in 2017.
“Tanzania’s hotel room revenue amounted to US$206 million in 2017, a decline of 5.5% over 2016 due to a drop in guest nights. However, we expect guest nights to grow in 2018 and forecast revenue growth of 10.2% for 2018”, the report added.
PwC reported further that hotels and tourism sectors in each of the countries were all showing signs of continued growth over the forecast period as tourism remains an important part of each economy.
It however cautioned that the smallest change or disruption can have a fundamental impact on the future growth of each market.
“It is therefore important that investors, hotel operators, tourism bodies and governments continue to work together to grow this important industry and ensure its sustainability so that all stakeholders derive the maximum benefit from it,” Calicchio stressed.
