Story by: Victoria Rosenthal for Hotel Management
A rising tide of both domestic and international travelers to Africa is driving the current demand away from luxury properties and toward mid-scale lodging options and niche segments, including serviced apartments.
The growing trend is spreading across the continent's city centers, including Lagos, Nairobi and Johannesburg. “The hotel market in Sub-Saharan Africa has evolved in the last decade with many global operators opening quality hotels in key markets like South Africa, Mauritius and Kenya,” Xander Nijnens, EVP, hotels & hospitality group Sub-Saharan Africa, JLL, said in a statement.
With a more than 70-percent occupancy across the region recorded in 2007, Africa's current hotel stock has been growing thanks to increased investment. West Africa, in particular, has seen an 8-percent rise per year in room supply for the last 10 years.
Africa's hotel industry continues to face impeding obstacles despite its rapid growth.
However, luxury demand is falling behind as the sector's supply continues to grow. “The current challenge is that too many upscale hotels opened relative to demand, resulting in a saturated market for four- and five-star hotels in many cities,” Nijnens said. Therefore, investors have turned their focus on mid-scale market development opportunities.
Changing leisure and corporate travel needs
Africa's developing cities are seeing a spark not only in leisure travel demand from a growing middle class, but also in the private sector's need for business travel across the region. “We are already seeing much more regional corporate travel, which was previously met by informal accommodation–guesthouses, lodges, for example,” Nijnens said. “Now, these travelers are looking for the quality and reliability that the branded mid-market and budget sectors can offer.”
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