Hotel Development in Africa Accelerates

  • Published by Ozgur Tore

africa hoteldev

According to the findings of this year’s Hotel Chain Development Pipeline Survey, produced by W Hospitality Group, there is a surge in hotel development in Africa, with a jump in the development pipeline to 270 hotels and nearly 50,000 rooms, and with sub-Saharan Africa (SSA) exceeding North Africa by almost 70%.

The data reveal a modest recovery in North Africa and increasing confidence in SSA - only two years ago the number of rooms in the North African pipeline was the same as that in sub-Saharan Africa. This year’s survey is based on contributions from 37 international hotel chains with 80 brands between them.


2015 Hotel Chain Development Pipelines in Africa

Regional Summary

  2011 2012 2013 2014 2015
  Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms
North Africa 75 17,038 77 17,217 73 18,065 73 16,449 79 18,565
Sub-Saharan Africa 76 13,700 100 17,109 115 18,191 142 23,283 191 31,150
TOTAL 151 30,738 177 34,326 188 36,256 215 39,732 270 49,715

The SSA region has far more national markets than North Africa, 49 countries vs five and these have historically been underserved with branded hotels. It’s now time for them to catch up and they are: Mauritania, for example, with no existing branded supply, now has three branded hotels in the development pipeline.

Growth in the pipeline in North Africa has slowed considerably, impacted by unrest and political conflict. For example, Libya, a country which many groups were focusing on just two years ago, has seen no new hotel development deals. Egypt, which has traditionally been a major growth market, lost some projects to delays and cancellations in 2014.

As a sub-region, West Africa has by far the greatest number of rooms in the pipeline, more than double East Africa. This is largely thanks to Nigeria, which became the largest economy on the continent in 2014 after it rebased its GDP figures. It has the largest population and the largest number of urban conurbations in one country, with the exception of South Africa.

As in previous years, Southern Africa continues to lag behind, with fewer rooms in development this year than in Central Africa and with the highest number of countries with no activity at all – five, namely Botswana, Lesotho, Malawi, Swaziland and Zimbabwe.

It is important to distinguish between deals which are still in the planning stage and those which are becoming reality, with construction started.  Table 3, below, shows the proportion of the deals (rooms) which are actually under construction – sub-Saharan Africa has many more signed deals than North Africa, but the latter has 78 per cent of the pipeline rooms on site, compared to 55 per cent in SSA.


2015 Hotel Chain Development Pipelines in Africa

SSA vs. North Africa by Pipeline Status

  Hotels Rooms
    Total Onsite Construction
Sub-Saharan Africa 191 31,150 17,070 55%
North Africa 79 18,565 14,428 78%

Looking at individual countries, Nigeria has by far the most rooms in the chains’ development pipelines, over 8,500 rooms in 51 planned new hotels.  That is more than the entire pipeline in Central Africa and East Africa combined!  Table 4 shows the top ten pipeline countries by number of rooms:


2015 Hotel Chain Development Pipelines in Africa

Top 10 Countries by Number of Rooms

    Hotels Rooms Average Size
1 Nigeria 51 8,563 168
2 Egypt 18 6,440 358
3 Morocco 31 5,474 177
4 Algeria 13 2,749 211
5 Tunisia 12 2,444 204
6 South Africa 13 1,662 128
7 Kenya 8 1,510 189
8 Libya 5 1,458 292
9 Ghana 8 1,399 175
10 Uganda 9 1,397 155

In 2015, all the countries in the top 10 (with the exception of Algeria and Libya) saw an increase in their pipeline from the previous year.  Kenya and Uganda saw the largest increases, at over 100 per cent and 90 per cent respectively, albeit from a much smaller base than the four leading nations.  Despite the continued difficulties that the country has faced, Egypt recorded a substantial 37 per cent increase in its pipeline, indicative of returning confidence. 

Nigeria, Egypt and Morocco have occupied the top three slots since 2011.  Whilst Nigeria has 33 per cent more rooms than second-placed Egypt, the average size of each planned hotel in Nigeria is less than half that in Egypt.  New hotels in North Africa generally, and particularly in Egypt, are of a much larger size. 

Egypt also has the highest “performing” pipeline in Africa, with almost 5,500 rooms under construction, compared to “only” 3,400 in Nigeria.  Table 5 analyses the top 10 countries with the highest proportion of planned hotels under construction.


2015 Hotel Chain Development Pipelines in Africa

Top 10 Countries by Pipeline Status

Rank Country Hotels Rooms Rank – All Deals
Total Onsite Construction
1 Egypt 18 6,440 5,480 85% 2↑
2 Morocco 31 5,474 3,795 69% 3↑
3 Nigeria 51 8,563 3,369 39% 1↓
4 Algeria 13 2,749 2,494 91% 4↔
5 Tunisia 12 2,444 1,501 61% 5↔
6 South Africa 13 1,662 1,196 72% 6↔
7 Libya 5 1,458 1,158 79% 8↑
8 Ethiopia 8 1,326 1,117 84% -↑
9 Kenya 8 1,510 1,050 70% 7↓
10 Rwanda 7 1,351 953 71% -↑

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