Tanzania - Dar es Salaam
Landlocked Uganda has announced it will build a major pipeline to export its oil through Tanzania. This is seen as a major source of confidence in Tanzania's stability and safety profile. From this major infrastructure investment Tanzania can generate more FDI and capitalise on the benefits of a subsidised route for its own oil. Dar es Salaam saw a 12% increase in room supply in 2015, unsurprisingly occupancy fell significantly. The 2015 elections will also have affected demand.
However, positively there was a substantial increase in ADR in local currency, pushing RevPAR up almost 7%. A 20% fall in value of the Shilling against the US$ results in a fall in value in the HVI, although it should be noted in local currency terms there was a noticeable increase in value. Any worsening of the security situation and accessibility are major threats for the future of Dar es Salaam hotel industry. Yet, corporate travelers and overnight tourists waiting to fly to more touristic destinations are coming in and international brands start entering the market. Although the additional supply will impact the occupancy level, the average rate will be boosted by a strong inflation and the introduction of four-star branded hotels in the city. The values are expected to grow by 4.1% in 2016, after three years of bad performance owing to the currency devaluation against the US dollar.