The findings of this year’s Hotel Chain Development Pipeline Survey, produced by W Hospitality Group, show that Lagos is the hottest city in Africa, when it comes to the development of new hotels by international hotel investors.
In compiling the data, W Hospitality Group spoke to 37 hotel chains with 80 brands between them.
To qualify for the study, hotel chains need to be operating in more than one country so by definition, more hotel development activity is taking place because domestic players in the market have not been counted.
Looking at Africa overall, 3,611 new hotel rooms are currently planned by the chains in Lagos, Nigeria’s commercial capital.
It is followed by Cairo, with 2,704 rooms, Abuja, Nigeria’s political capital with 2,177 rooms, and Marrakesh with 1,994 rooms.
While Nigeria is evidently hot, so too is Egypt, thanks to substantial development in the resort destination Sharm el Sheikh, with 1,970 rooms in the pipeline there.
The five next most active cities are Algiers with 1,761 rooms, Dakar with 1,341 rooms, Addis Ababa with 1,326 rooms, Nairobi with 1,220 rooms and Kampala with 1,181 rooms
Excluding North Africa from the analysis brings into the top ten some relatively small markets such as Kigali and Conakry, where there must be some concern regarding oversupply – if all the hotel deals that are planned go ahead.
Nigeria continues to dominate – 40 per cent of rooms in the top ten are in Lagos and Abuja.
Trevor Ward, managing director, W Hospitality Group, said: “While it is fantastic to see so much investor enthusiasm, one must bear in mind the practical challenges of developing hotels in Africa.
“For example, of the 11 hotel deals signed in Abuja, only two, the Fraser Suites and the Hilton Garden Inn, are actively under construction. Patience and a long-term view are needed.”
A record 79 deals were signed in 2014.
Some of the deals signed in previous years have, of course, become reality, and are operational.
However, a number of deals are still on the books after several years.
Matthew Weihs, managing director, Bench Events, which organises the Africa Hotel Investment Forum (AHIF), which attracts all the major international hotel investors in Africa, where the report will be discussed in detail, concluded: “Nigeria is evidently a magnet for hotel investment right now but what excites me is the level of hotel development in other cities in the rest of Africa – lots of exciting places that should be keen to attract AHIF and showcase how they are reinventing themselves.
“I am also pleased to note that the cities where AHIF has been hosted recently, Addis Ababa and Nairobi, are highly placed in the hotel development rankings.”
AHIF is the preeminent gathering of international investors in hotels in Africa.
It takes place in Addis Ababa on September 30th-October 1st.