Pandemic Shattering Dreams of Africa’s Hotel Industry: Survey

Addis Ababa, June 17/2020(ENA) The COVID-19 outbreak is shattering the dreams of Africa’s hotel industry which had returned to growth at the start of 2020 with more than 78,000 rooms in 408 hotels in the pipeline, according to W Hospitality Group survey. 

W Hospitality Group’s Managing Director, Trevor Ward said “the growth of the chains presence in Africa has been a very positive story since we started this analysis in 2009. It is quite clear from the numbers that the chains, the developers, the investors and all of us at W Hospitality Group continue to believe in the opportunities that Africa presents in the hotel and tourism industry.”

However, the industry has been devastated by the impact of COVID-19, possibly more so than most other economic sectors, mainly because of the almost total shutdown of borders and of the aviation sector – no flights means no guests, he noted.

According to latest data, there are 90 hotels with 17,000 rooms scheduled to open in 2020, but the estimate is that at least half of these will be delayed, bringing the actualization rate down to no more than 40 percent.

This year’s African Hotel Chain Development Pipeline survey covered 35 international and regional hotel contributors across the 54 countries in north and sub-Saharan Africa, and in the Indian Ocean islands, according to a press release of W Hospitality Group.

The survey revealed a 3.6 percent increase on the 2019 pipeline. Most encouraging was a record 68 chain hotels opening last year, fully 75 percent of those which were scheduled to open, with 11,000 rooms.

According to Ward, “we have to wait and see what will happen in the second half of 2020, and in 2021, as we emerge from lockdown and other restrictions.”

Tourism is such an important industry in Africa, because of the direct and indirect jobs that it creates and sustains, as well as its strong foreign currency earnings. “We are anxious to see hotels reopen and get back to contributing to the African growth story”, he added.

Matthew Weihs, Managing Director of Bench Events said on his part “Right now, we are facing the biggest recession in history. For those seeking to operate hotels, it is a dreadful time.”

However, he noted that for the savvy investors, this is actually a moment of opportunity because hotels are a long-term investment and one of the secrets of success is to spend money during the bottom of the economic cycle in order to capitalise on the upturn as soon as it comes.