TRAVEL AND TOURISM
A New Wave of Tourism
African hospitality’s rollercoaster ride
With the popularity of the African continent as a holiday destination increasing in recent years, the hospitality sector has subsequently experienced a boom in the demand placed upon it.
The developments taking place to create adequate infrastructure are substantial, alongside ensuring that there is a working model in place for the sustainable growth of tourism on the continent.
As part of the recent Distinguished Speakers Series, Trevor Ward, Managing Director of W Hospitality Group spoke to a selection of the Ecole Hôtelière de Lausanne’s students about the outlook for the hospitality sector in Africa moving forward, and has also been a guest lecturer in the EHL Masters in Global hospitality.
Towards the end of 2017, Zimbabwe witnessed the end of a long era, as a soft revolution ousted President Robert Mugabe, and brought in Emmerson Mnangagwa. Shortly after this monumental event for the country, we saw the election of Cyril Ramaphosa as the leader of South Africa’s ruling African National Congress (ANC), who is on course to become the country’s next president.
Elections are hugely important for the hospitality industry in Africa, as political power tends to be more centralised than in more mature democracies and therefore major shifts are not uncommon. Investors - including those who stay in hotels, and those who invest in them - need the stability that goes onto breed confidence, and that means economic growth, a virtuous circle from which hotel owners benefit through increased occupancy rates.
In 2018, elections are scheduled in Cameroon, Egypt, Mali, Sierra Leone, South Sudan, and Zimbabwe and potentially in the Democratic Republic of Congo (DRC), however, the latter is the least likely to actually take place. Zimbabwe’s election will be carefully watched. Investors in many sectors - not just hotels - are keen to re-enter the country, having been deterred for many years by the indigenisation policies of Mugabe, and we could see a massive increase in investments if the political environment is conducive.
Leading up to, and during the elections, hotels benefit from the increased traffic from international observers, politicians, officials, and others who criss-cross the country. But it is the four-five-year aftermath that really matters.
Kenya had two presidential elections in 2017 and the impact on the hotel industry was positive, as the Government ‘gets’ tourism. The authorities responsible for the industry were quick to promote the country, even running a campaign on regional digital satellite TV service, DStv promoting the attractions of Nairobi, alongside the traditional beach and safari product.
According to a report published around this time last year, almost 20,000 new rooms in 117 chain hotels are scheduled to open this year out of a total pipeline of 73,000 rooms, an increase on the current supply of some 12.5 percent. Putting that into context, however, Africa has a shortfall of almost 500,000 rooms to reach the rooms per population head ratio of Asia-Pacific. That’s a long way to go, but it is getting there. In 2009, the entire pipeline of future openings was just under 30,000 rooms.
At present there looks to be a continuation of the rollercoaster ride that Africa’s economies and the tourism industry that is so important for many countries. But for many, it will be onwards and upwards.