The findings of this year’s Hotel Chain Development Pipeline Survey, produced by W Hospitality Group, indicate that Lagos is the top-choice city in Africa for the development of new hotels by international hotel investors.
In compiling the data, W Hospitality Group spoke to 37 hotel chains with 80 brands among them.
To qualify for the study, hotel chains must have been operating in more than one country. As domestic players in the market have not been taken into account, this means that more hotel-development activity is taking place.
In Africa overall, 3,611 new hotel rooms are currently being planned by the chains in Lagos, Nigeria’s commercial capital. This is followed by Cairo, with 2,704 rooms, Abuja, Nigeria’s political capital, with 2,177 rooms, and Marrakesh with 1,994 rooms.
While Nigeria is evidently hot, so too, is Egypt, thanks to substantial development in the resort destination Sharm el Sheikh, which has 1,970 rooms in the pipeline.
The five next most active cities are Algiers with 1,761 rooms, Dakar with 1,341 rooms, Addis Ababa with 1,326 rooms, Nairobi with 1,220 rooms and Kampala with 1,181 rooms
Excluding North Africa from the analysis brings some relatively small markets, such as Kigali and Conakry, into the top ten. If all the hotel deals being planned go ahead, there must be some concern regarding oversupply.
Nigeria continues to dominate – 40 per cent of rooms in the top ten are in Lagos and Abuja.
Trevor Ward, managing director, W Hospitality Group, said: “While it is fantastic to see so much investor enthusiasm, one must bear in mind the practical challenges of developing hotels in Africa.
“For example, of the 11 hotel deals signed in Abuja, only two, the Fraser Suites and the Hilton Garden Inn, are actively under construction. Patience and a long-term view are needed.”
A record 79 deals were signed in 2014. Some of the deals signed in previous years have, of course, become reality, and are operational.
However, a number of deals are still on the books after several years. At the Africa Hotel Investment Forum, which attracts all the major international hotel investors in Africa, the report will be discussed in detail. Matthew Weihs, Managing Director of Bench Events, organizers of AHIF, concluded: “Nigeria is evidently a magnet for hotel investment right now, What excites me, however, is the level of hotel development in other cities in the rest of Africa – lots of exciting places that should be keen to attract AHIF and showcase how they are reinventing themselves.
“I am also pleased to note that the cities where AHIF has been hosted recently, Addis Ababa and Nairobi, are highly placed in the hotel development rankings.”
AHIF is the pre-eminent gathering of international investors in hotels in Africa.
It takes place in Addis Ababa on September 30th-October 1st.