It’s Egypt, Morocco, Accor & Marriott

Four words suffice to sum up the key findings of this year’s African Hotel Chain Development Pipeline Survey conducted by W Hospitality Group, in association with the Africa Hospitality Investment Forum (AHIF); those words are Egypt, Morocco, Accor and Marriott.

This year’s annual survey, which is widely recognized as the industry’s most trusted source, has a record 42 global and regional (African) contributors in the first quarter of 2022, reporting a pipeline of hotel development activities totaling approximately 80,300 rooms in 447 hotels, in 42 of Africa’s 54 countries.

Looking first at the number of rooms physically under construction, Morocco and Egypt lead the pack, with 5,577 and 6,142 rooms respectively. They are followed by: Ethiopia, 3,871; Cape Verde, 3,016; Nigeria, 2,544; Kenya, 2,450; Algeria, 2,337; Tunisia, 2,280; South Africa, 1,948 and Senegal, 1,919. In Tunisia, Kenya and Morocco, more than ¾ of the pipeline is “on site”, while in Egypt, 71% is only at the construction stage. planning, which reflects its relatively “young” gas pipeline (many signed in the last 3 years).

While Nigeria has 45% on the spot; eight of the 15 hotels (with half the total rooms) that have started construction have stalled and sites are closed.

Source: The Bench
Source: The Bench

The picture changes somewhat when looking at the parts in project as well as those under construction. In this approach, Egypt is the star. It not only tops the national rankings, with more than 21,000 rooms in 85 hotels under development, up 20% from last year; but he is leading the pack. It has nearly three times as many planned new chambers as Morocco, and nearly four times as Nigeria, which has topped the charts for many years. Additionally, with continued signing activity (20 hotels with approximately 5,250 rooms last year), Egypt now accounts for over 25% of the total hotel development pipeline. Morocco has 7,209 rooms under development, spread over 50 new hotels; Nigeria has 5,619 rooms in 33 hotels, Ethiopia has 5,206 rooms in 29 hotels, and Cape Verde has 4,639 rooms in 17 hotels. The next five places are occupied by Algeria, 3,202 rooms, Kenya, 3,155 rooms, South Africa, 3,133 rooms, Tunisia, 2,918 rooms and Senegal 2,693 rooms.

Source: The Bench

Notably, four of the five North African countries are among the top ten; and the top ten countries account for 67% of total hotels and 74% of rooms in the survey.

While Africa’s hotel development pipeline is at its strongest ever, with 80,291 rooms planned or built, the headline figure masks a reduction in sub-Saharan Africa, where hotel investment has been higher in recent years. Of the six sub-Saharan countries in the top 10, only Cape Verde saw an increase in planned rooms, of 33%, while the “powerhouses” Nigeria, Ethiopia, Kenya and South Africa saw between them a drop of 29%; Nigeria is down 41%. There are three main reasons for this reduction: fewer new opportunities in the region; opening of some 2,700 rooms in 15 hotels last year, and a “pipeline cleanup” that hotel chains do periodically to cut various projects that are unlikely to come to fruition.

Source: The Bench

When it comes to hotel chain development activity, Accor and Marriott are almost as dominant as Egypt and Morocco, each accounting for just over 25% of the entire pipeline! Accor has 20,857 rooms under development, spread over 107 establishments; Marriott has 20,248 rooms across 103 properties. Hilton, in third place, has about half as many rooms, 10,505 in 55 hotels. Radisson, 4th, has 6,248 rooms in 35 hotels. The next six places are occupied by IHG, 3,136 rooms, Barceló, 2,488 rooms, Hyatt, 1,995 rooms, Meliá, 1,743 rooms, Louvre, 1,273 rooms and Minor, 1,203 rooms.

Source: The Bench

IHG deserves a comment, due to its growth of more than 10%. It has signed an agreement for four Indigo-branded hotels in Egypt, with a total of 650 rooms, as well as a 300-room InterContinental hotel in the new capital of Cairo.

Analyzing the number of rooms under construction, as opposed to those just in the pipeline, significantly changes the ranking of the hotel chain, as Accor only has 26% of its pipeline on site, while Marriott and Hilton have about 57. % and Radisson 85%. This puts Marriott in first place, Hilton in second, Accor in third and Radisson in fourth. The top ten combined hold 82% of all chambers under construction in Africa, and the top four account for 66% of the total, up from 58% last year.

Source: The Bench

Trevor Ward, Managing Director of W Hospitality Group, said: “Chains expect 200 new hotels to open this year and next, although their expectations can sometimes be overly optimistic! After a positive trend in 2019, the discounting of hotel offers (i.e. the proportion that actually opened, compared to what the chains expected to open) was less than 30% in 2020 and 2021 – however, that was completely understandable with pandemic travel restrictions killing demand for hotel rooms.

Trevor continued: “I am not surprised by the slowdown in the number of deals being signed in sub-Saharan Africa, as the past two years have seen not only the pandemic making it more difficult to travel and meet new partners, but also less investor appetite for major markets such as Ethiopia, Nigeria and South Africa. However, what surprises me is that the majority of investment is going into high end, upscale and luxury hotels, when there is a very high demand across Africa for budget and luxury hotels. decent quality mid-range.

Matthew Weihs, Managing Director of The Bench, which organizes AHIF, concluded: “As the hospitality industry has just gone through the darkest period of my professional career, it is fascinating to see that the pandemic has nothing designed to shake long-term investor confidence. in hospitality. On the contrary, the savviest financiers saw it as an opportunity. They have been encouraged by enlightened governments, like that of Morocco, which have spent billions of dollars on new infrastructure to incentivize investment in tourism. Also, judging by our other sold-out conferences this year, we can see how eager people are to travel again and how valuable it is to meet face-to-face rather than via video link. . I am confident that when AHIF takes place November 2-4, in Taghazout, near Agadir, we will see the atmosphere buzzing, with very productive networking and with more deals announced than ever before.

An update on the pipeline development survey, along with in-depth information, will be presented by Trevor Ward at AHIF. The event is the leading conference of its kind in Africa, connecting business leaders and fueling investment in tourism projects, infrastructure and hotel development across the continent.

About W Hospitality Group

W Hospitality Group, a member of Hotel Partners Africa, specializes in providing advisory services to the hospitality, tourism and leisure industries, offering a full range of services to clients who have investments in the sector or who seek to enter. through development, acquisition or other means. In sub-Saharan Africa, W Hospitality Group is considered the market leader due to the commercial and financial expertise of its staff, its global knowledge and its commitment to its customers. In Africa, W Hospitality Group has so far operated in 40 countries on the continent, from its offices in Lagos and Addis Ababa.

About the Africa Hotel Investment Forum (AHIF)

AHIF is Africa’s premier hotel investment conference, attracting many international hotel owners, investors, financiers, management companies and their advisors. It is organized by The Bench (www.thebench.com), which has a long track record of organizing several high-end hotel investment conferences and forums across Europe, the Middle East, Africa, Asia and the Latin America. The Bench’s mission is to enable prosperity by facilitating growth, networking and thought leadership in the hospitality industry worldwide. www.thebench.com. AHIF’s sponsors are Host Partner: Moroccan Agency for Tourism Development (SMIT) Platinum Sponsors: IHG and Radisson Hotel Group; Gold Sponsors: Aleph Hospitality, CityBlue, Insignia, Louvre Hotels Group, Marriott International, TIME Hotels; Silver Sponsor: HVS.

David Tarsch
+44 (0) 20 7602 5262
The bench