Hotel developers to invest hugely in South African projects over next few years

Published on : Wednesday, October 19, 2016

SouthafricaholidaysIn order to seek to take advantage of a fast-expanding middle class and growing business travel, hotel developers will invest billions of dollars in African projects over the next few years.


There has certainly been an increase in the number of UAE travellers to South Africa. From April 2014 to March 2015, more than 8,500 visas to South Africa were issued in the UAE, according to statistics data, rising to more than 8,800 last year. For the first seven months of this year, almost 7,000 visas were issued.


Overall room revenue in the five markets of South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 6.7 per cent in 2015, the largest gain since 2011, according to PwC’s Hotels Outlook: 2016-20 report. This is further expected to increase at an 8.6 per cent compound annual rate to 53.4 billion rand (Dh13.69bn) in 2020 from 35.4bn rand in 2015.


According to JLL, the US-based financial and professional services firm, nearly US$3.5bn will be invested in hotels over the next two years.The growth is all the more remarkable as it comes against a backdrop of declining commodity prices that underpinned many African economies.


Already international brands have been announcing plans to expand or increase African exposure. Marriott International, the world’s largest hotel company, this month opened its first African property, the Marriott Hotel in Rwanda’s capital, Kigali. A few days after the Kigali property opened its doors, Marriott announced plans for the construction of three new hotels in Cape Town. Marriott recently completed its purchase of Starwood Hotels and Resorts.


Other brands familiar to UAE travellers are also piling in; Best Western, which operates a resort and spa in Abu Dhabi, and Carlson Rezidor, the operator of the Radison Blu brand, have also said they will be expanding across Africa.


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