Medina Palms Hotel

PwC’s report, Hotels Outlook; 2018-2022 provides perspective on how the hotel industry in the major markets of Africa including South Africa, Nigeria, Mauritius, Kenya and Tanzania is expected to unfold over the next five years.

Overall, the report points that Africa’s hotel sector has the potential for further growth over the next five years, citing increase in the number of foreign and domestic travellers as a major driver of growth.

Kenya’s tourism sector growth sustained momentum in 2017, helped by the launch of the Standard Gauge Railway (SGR), which has made travelling within country much easier and less time consuming. New international hotel openings and an improvements in the country’s security status also made Kenya the attractive destination it had always been prior to the surge in terrorism in the region.

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Last year, the sector’s growth was briefly interrupted following the Supreme Court ruling, after which normalcy returned around December. Overall, tourist arrivals grew 9.9% in 2017 compared to 13.7% in 2016.

In addition, hotel guest nights which were expected to grow at a rate of 6%, fell 19% during the latter part of the year in response to the election uncertainties, leading to an 8.3% decrease for 2017 as a whole. The average daily rate (ADR) also declined, falling 5.7%, leading to a 13.5% decline in hotel room revenue in 2017.

With things returning to normal, the PwC project that inflation will drop to 4.5% for 2018 and to average 4.1%, compounded annually through 2022. They also expect a 9.1% increase in guest nights for 2018 as a whole and tourist arrivals to Kenya to increase 8.8% in 2018.

This is based on the impending launch of direct flights to the US by Kenya Airways, a development expected to increase tourist volumes, the tourism sectors marketing initiatives within Africa and concerted efforts to market the country as a tourism destination.

Also Read; Murang’a hotel boom key for county’s hospitality sector growth

According to the report, 13 hotels will enter the market over the five-year forecast period, adding a total of 2 600 rooms which accounts for a 14% increase in hotel capacity and a 2.6% compound annual increase in room availability from 2017

Of the five countries analysed, Nigeria’s hotel sector is expected to be the fastest-growing in Africa over the next five years with the number of hotel rooms expected to rise from 9, 700 in 2017 to 12,600 over the forecast period.

NextHotel brands’ expansion creates development opportunities for Nairobi

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