Tanzania and Kenya are among African nations where the hospitality industry is forecast to maintain a growth trajectory over the next five years, amid economic uncertainty, tempered foreign direct investment and threats of terrorism.
A new report by audit firm PwC shows that growth in tourism numbers coupled by governments’ efforts to promote MICE (meetings, incentives, conferences and exhibitions) infrastructure to attract more business tourists is driving the growth of the hotels industry.
Airbnb, which is gaining momentum as a mainstream tourist option across the continent, and improvements in air connectivity are also expected to propel growth in the industry, which has witnessed significant growth in recent years with the entry of global brands, some of which are opening new hotels.
Radisson, Marriot, Best Western, Sheraton, Ramada, Hilton and Mövenpick are among the international brands that are flocking to East Africa or opening new facilities aiming to capitalise on the projected tourism growth and interest from businesses scouting for opportunities.
The Hotels Outlook: 2019-2023 Report projects the hotel industry in Tanzania and Kenya to be among the fastest growing on the continent, with compound annual increases of 8.2 per cent and 7.4 per cent respectively.
"Increased room capacity, a strong economy, growth in tourism from India and China, and Tanzania’s appeal as an exotic destination will fuel growth over the next five years," says the report.
However, during the next five years, Nigeria will be the fastest-growing market with a projected 12 per cent compound annual increase.
Mauritius is expected to grow at 5.7 per cent and South Africa at 3.3 per cent.
Both Kenya and Tanzania are witnessing a significant rebound in the hospitality industry after scares occasioned by tax measures and terrorist threats and attacks, especially for Kenya.
In Tanzania, hotels earnings decreased after the government introduced 18 per value added tax on tourism services in 2016 and a fixed rate concession fee in 2017 that increased costs for travel agents and other travel packagers resulting in demand decline.In Kenya, there have been concerns that the terrorist attack at the Dusit D2 hotel complex in Nairobi in January may temporarily affect tourist arrivals and guest nights that began in 2018.Despite the drawbacks, the hospitality industry in Tanzania and Kenya expects steady growth, with the number of hotel rooms in Tanzania projected to increase by 2.4 per cent from 7,800 in 2018 to 8,800 in 2023.Guest nights are expected to rise from 1.6 million […]