With tourism and business travel in most of the world’s countries prohibited due to Covid-19, the international hospitality industry is reeling financially.
However, once the game-changing pandemic slows, Africa’s hospitality sector will be the place to invest, predicts Minor Hotels’ regional director for Africa, Mark Havercroft.
Minor Hotels operates mainly in the Asia Pacific region, with 537 hotels in 55 countries.
Havercroft said according to a recent McKinsey & Company report, Africa is the world’s youngest and fastest-urbanising continent.
The numbers alone offer the hospitality sector the greatest potential for attractive returns on investments in infrastructure, mainly hotels.
The report estimates that Africa will have an average of 24-million more people added annually to its total city populations in the years to 2045, which surpasses India and China combined.
By 2034, Africa will have a larger working population than either China or India.
To support the population, several new mega-cities are needed, which will add to the appeal of Africa’s hospitality sector.
Havercroft said faced with global shutdowns of their properties, dominant international hotel management brands have everything to lose.
Relatively smaller international brands could be the big winners in Africa.
PwC’s South Africa Hospitality Outlook review for 2019-2023 focused on hospitality in SA and Southern Africa.
It predicted growth in affordable three-star hotels.
The area’s hospitality sector grew 7.4% in 2018, due mainly to a 28% turnaround in Kenya and 15.4% in Tanzania, with double-digit increases in the other countries.
SA was the only laggard, with room revenue growth falling to just 0.5%.
PwC predicted that SA’s aggressive bidding for international meetings, incentives, conferences and exhibitions would boost revenue in the sector once the pandemic wanes.
The Tourism Amendment Bill 2019 will work in favour of hotel groups as it seeks to regulate “short-term home rentals”, cutting into the growing home-sharing industry.
Havercroft said the race to capture the continent from what he terms “the big boys of the hospitality game” was already under way before the virus hit but it will now intensify.
‘Smart money to boost Africa’s hospitality sector’
Image: SUPPLIED
With tourism and business travel in most of the world’s countries prohibited due to Covid-19, the international hospitality industry is reeling financially.
However, once the game-changing pandemic slows, Africa’s hospitality sector will be the place to invest, predicts Minor Hotels’ regional director for Africa, Mark Havercroft.
Minor Hotels operates mainly in the Asia Pacific region, with 537 hotels in 55 countries.
Havercroft said according to a recent McKinsey & Company report, Africa is the world’s youngest and fastest-urbanising continent.
The numbers alone offer the hospitality sector the greatest potential for attractive returns on investments in infrastructure, mainly hotels.
The report estimates that Africa will have an average of 24-million more people added annually to its total city populations in the years to 2045, which surpasses India and China combined.
By 2034, Africa will have a larger working population than either China or India.
To support the population, several new mega-cities are needed, which will add to the appeal of Africa’s hospitality sector.
Havercroft said faced with global shutdowns of their properties, dominant international hotel management brands have everything to lose.
Relatively smaller international brands could be the big winners in Africa.
PwC’s South Africa Hospitality Outlook review for 2019-2023 focused on hospitality in SA and Southern Africa.
It predicted growth in affordable three-star hotels.
The area’s hospitality sector grew 7.4% in 2018, due mainly to a 28% turnaround in Kenya and 15.4% in Tanzania, with double-digit increases in the other countries.
SA was the only laggard, with room revenue growth falling to just 0.5%.
PwC predicted that SA’s aggressive bidding for international meetings, incentives, conferences and exhibitions would boost revenue in the sector once the pandemic wanes.
The Tourism Amendment Bill 2019 will work in favour of hotel groups as it seeks to regulate “short-term home rentals”, cutting into the growing home-sharing industry.
Havercroft said the race to capture the continent from what he terms “the big boys of the hospitality game” was already under way before the virus hit but it will now intensify.
“Big brands falter when the market demands fast and flexible adaptations.
“Many are unable to leverage their international dominance to protect local owners and investors.”
He said that the McKinsey report displayed robust long-term fundamentals for future economic growth.
Africa has abundant resources, and job creation is expected to outpace growth in the labour force.
Havercroft said as business travel demand increased in Africa, together with the growth of local markets for leisure tourism, these factors would combine to make the continent a standout investment option.
It will offer enormous potential for above global average returns on investment in the hospitality arena.
“The challenges that Africa poses are what attracted us [MH] to the continent in the first place; to capture the burgeoning and in many ways unique traveller market.”
MH has luxury and four-star hotels in Mauritius, Namibia, Lesotho, Botswana, Mozambique, Seychelles and Zambia “but now needs a presence in the mid-market space, for both business and leisure travellers”.
Post-Covid-19, he said, the game-changer brands would be those that were agile and adaptable, recovered fastest and restored investor confidence soonest.
“It is in markets such as those on the African continent, we believe, where the real future potential lies.”
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