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Africa’s hotel supply projected to grow 11% Today's News


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Based on August 2017 data from STR (hotel market data and benchmarking), Africa currently has 301 hotel projects in the pipeline, accounting for 57 011 rooms, or 11.0% of the continent’s existing room supply. 

Below is an overview of selected hotel markets:

Egypt

As of August, hotels in Egypt posted a 70.1% increase in average daily rate (ADR) to EGP1 185.53 ($67) While the country’s ADR has remained above EGP1, 000 ($57) each month since November 2016, the devaluation of the Egyptian pound has significantly inflated figures. When quoted in US dollars, Egypt’s ADR declined 17.2% from January to August 2017, dropping to an actual level of $66.54. Occupancy, on the other hand, rose 17.2% to 52.7%.

At the market level, Cairo posted an 8.5% increase in occupancy and a 72.5% increase in ADR (-16.2% in US dollars), resulting in 87.2% growth in revenue per available room (RevPAR) to EGP997.58 ($57). Although Sharm El Sheikh recorded a 13.9% increase in occupancy for the first eight months of the year, the market’s actual occupancy level was only 40.4%. STR analysts note that security concerns continue to hinder Sharm El Sheik’s hotel demand.

Nigeria

With the current pipeline representing more than half of the market’s existing hotel rooms, STR analysts expect that supply growth will continue pressuring Nigeria’s occupancy levels in the near future. August year-to-date data shows a 1.2% decline in occupancy to 44.3% but a 6.8% increase in ADR to NGN47 819.53 ($2). When measured in US dollars, however, ADR declined 23.3% to US$149.58. The market currently faces several challenges, with security concerns as well as struggles in Lagos due to the low oil prices.

Ethiopia

Hotels in Ethiopia have experienced mixed performance levels thus far in 2017, with occupancy down 6.7% to 51.6% and ADR up 8.0% to ETB4, 914.13 ($39). STR analysts note that the country’s number of room nights available increased 4.2% compared with the first eight months of 2016, which has affected occupancy levels. For the month of August, RevPAR was down 5.4% to ETB1, 834.81 ($36), mainly the result of a 4.2% drop in occupancy. Rate performance has been stronger on weekdays than weekends this year, indicating growth in corporate business, but occupancy levels are down for both weekdays and weekends.

STR’s data sample in the hotel industry comprises more than 58,000 hotels and 7.8 million hotel rooms around the world. Pipeline data reported by STR is gathered from major chains, proprietary software, management companies and independent sources.


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