What Economic Headwinds? Hotel Construction Is Booming In Sub-Saharan Africa

Written by Kevin Mwanza

The hotel industry will enjoy a boom in sub-Saharan Africa in the next three years, with East Africa leading the growth that will see about $3.6 billion worth of investment into the sector in the next two years.

Tourism, diplomatic and non-governmental activities in the East African nations of Kenya, Rwanda and Ethiopia are leading the growth.

The global fall in commodity prices especially oil and political instability have hindered a similar trend in Nigeria, the continent’s biggest economy and Democratic Republic of Congo (DRC), Africa’s richest nation in mineral resources, according to a report by Jones Lang LaSalle, an investment management firm.

The demand rate for hotel services of about five percent will increase the number of hotel rooms from 257,000 last year to 264,000.

Marriott International, the world’s leading luxury hotel chain opened an outlet in Kigali, Rwanda last week. This is its first hotel in sub-Saharan Africa.

It is the first international hotel to set base in the tiny East African nation, one of the fastest growing economies on the continent.

The global hotel industry leader also plans to build five hotels in South Africa, the second biggest economy on the continent.

The five will be build in Cape Town and Johannesburg at a cost of $ 218 million, Sunday Times reported.

Hilton Worldwide, another leading hotel chain in the world will build the first modular hotel in Africa. Hilton Garden Inn, a 280 guest-room hotel will be in Accra, the capital.

It will also build the tallest hotel in Africa. The 255-guest-room will cost $110 million and will be completed in 2020, Africa Property News reported. The hotel will measure 330 meters high.

Africa has attracted the world’s leading hotel chains including Marriott International, Hilton Worldwide, Starwood, Carlson Rezidor and Accor.

The industry’s estimated growth is 30 percent, this year, making it one of Africa’s best performers, Cityscape Magazine reported.

The continent has the fastest-growing middle-class in the world. About 34 percent of Africa’s population spends up to $2.20 a day, according to data by African Development Bank.

This has led to a burgeoning in domestic tourism, pulling investors to tailor-make midscale hotels to accommodate them.