HOTELS AFRICA - RESEARCH - Accommodating growth in Africa - Knight Frank
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RESEARCH
HOTELS
AFRICA
2018
Accommodating growth in Africa
HOTELS AFRICA 2018 RESEARCH
AFRICA HOTELS: HOTEL MARKET OVERVIEW
ROOMS FOR GROWTH Hotel supply levels vary greatly across Africa.
The growth potential of Africa is increasingly The distribution of Africa’s current Elsewhere in Africa, the tourist islands of Hotel development hotspots in East
AFRICA IN 2030 recognised by international hotel operators, investors supply of branded and chain hotels is Mauritius, the Seychelles and Zanzibar all
have a significant presence of branded
Africa include the major cities of Kenya,
illustrated by the hotel density map on Ethiopia and Tanzania.
POPULATION GROWTH and developers. pages 4-5. The current hotel stock is hotels and resorts. In contrast, some of
Although it is a comparatively well-
By 2030, Africa’s population heavily concentrated in a small number Africa’s largest cities, including Kinshasa,
will increase by 36% to Khartoum and Addis Ababa, have only a supplied region, North Africa continues
Global and local hotel chains have Africa’s population is growing at a faster of markets. South Africa has the
1.7 billion targeted Africa as a growth region, rate than that of any other global region; largest supply, with almost 30% of the handful of international branded hotels.
Across Africa, more than half of the
to see new development, accounting
for around 29% of pipeline projects.
due to both its relative undersupply it is currently home to around 1.2 billion continent’s chain hotels. The largest
continent’s capital cities have fewer than This stems from the expansion of major
of international-quality hotels, and the people, but UN projections suggest hotel markets in South Africa
URBANISATION five chain hotels each. multinational chains, and from Middle
expectation of increased demand for that this figure will more than double are Johannesburg and Cape Town, but
By 2030, Africa’s urban Eastern hotel developers and chains
population will rise by 63% rooms. Underpinning this are Africa’s by 2050 40m
and that it will pass 4 billion by chain hotels are spread widely across The distribution of pipeline projects varies entering North Africa.
770 million
40m end of the century. Growth will be
the
to long-term economic and demographic the country, due in large part to the significantly compared with the existing
growth prospects, which have continued increasingly concentrated in the large extensive hotel networks of local brands supply, reflecting the increased focus of Across the continent, development
to attract hotel groups’ interest despite cities of Sub-Saharan Africa, with the such as Protea Hotels, Tsogo Sun and activity is being driven primarily by
international chains on markets currently
CITY GROWTH a slowdown in overall African economic populations of cities such as Luanda, City Lodge. perceived as being undersupplied. the expansion plans of the larger
Africa will have 15 cities 40m Lagos, Dar es Salaam, Nairobi and Addis
with populations over growth in recent years. 40m Most strikingly, 35% of projects under multinational hotel groups. All of the
5in 2030, Ababa forecast to grow by more than Outside of South Africa, the largest
million Pan-African GDP growth dropped to 80% during the 2015-2030 period. concentration of chain hotels is in
development in the continent are in
West Africa, which is home to only
major global players have multiple hotels
under development across Africa, and
compared with 2.1% in 2016, its lowest level in more the North African countries of Egypt,
7 cities today 40m Africa’s fast-growing, economically 9% of the current supply. The greatest several of them have made eye-catching
than two40m
decades,
40m primarily
40m due to the Morocco and Tunisia. Resort locations
40m 40m 40m 40m 40m 40m 40m developing cities will need increased concentration of these projects is announcements about their future
impact of lower commodity prices on such as Sharm El Sheikh, Hurghada
ECONOMIC GROWTH numbers of hotel rooms to in Nigeria, primarily in Lagos and African plans. Hilton, for example,
its major oil-dependent economies. and Marrakesh are among the biggest
Africa’s economy will be accommodate both business travellers Abuja, where multiple hotels are under launched its US$50 million Africa Growth
worth US$3.8 trillion However, growth is estimated by the markets in these countries, but
and rising tourist demand. Over the long development for international brands Initiative in late 2017, with the aim of
in 2030, more than International Monetary Fund to have international hotel chains also have a
60% bigger than today term, the UN World Tourist Organization including Hilton, Sheraton and Marriott. adding 100 African properties to its
reasonably large presence in commercial
Tanzania
Kenya
Nigeria
Mauritius
Uganda
Namibia
Côte d'Ivoire
Botswana
Mozambique
Zimbabwe
Egypt
Tunisia
South Africa
Morocco
Algeria
recovered to approximately 3.5% in forecasts that international tourist
cities such as Cairo and Casablanca, The East Africa region also accounts for a portfolio over the next five years. The
2017. The large oil-driven economies of numbers in Africa will grow at one of the
where demand is driven by business significant share of pipeline projects, with activities of other major hotel groups are
Nigeria and Angola are gradually moving fastest rates globally. Africa received
TOURISM GROWTH travellers in addition to tourism. 26% of the projects under development. outlined on pages 6-7.
Annual international tourist out of recession, while growth rates 57 million international tourist arrivals
arrivals will more than double have remained resilient in less resource- in 2016, but the UNWTO projects that
by 2030 to reach
134million
dependent countries such as Kenya, this will reach 134 million by 2030. At
Ethiopia, Tanzania, Côte d’Ivoire and FIGURE 2
present, Morocco is the top destination
Senegal. These countries are forecast to
Number of chain and branded hotels – top ten countries in Africa
with over 10 million arrivals, but future
Source: UN Population Division, USDA Economic maintain annual GDP growth in the 5-8% growth is forecast to be strongest in the
Research Service, UN World Tourism Organization range over the next five years. East, West and Central regions of Africa.
FIGURE 1 10.0m 10.3m
Annual international tourist arrivals (millions) – top ten
countries in Africa
5.3m 5.7m
2.2m
1.3m 1.4m 1.5m 1.6m 1.7m
68 60 58 46
Mozambique
Côte d'Ivoire
South Africa
Zimbabwe
Botswana
Morocco
Namibia
Tunisia
Algeria
Egypt
31 28
430 300 153 103
SOUTH AFRICA EGYPT MOROCCO TUNISIA KENYA MAURITIUS NIGERIA TANZANIA ZIMBABWE ALGERIA
Source: United Nations World Tourism Organization. 2015 or 2016 data, depending on availability Source: Knight Frank Research. Hotel numbers exclude lodges, safari camps, chalets and cruise-hotels. Data as at December 2017.
2 3HOTELS AFRICA 2018 RESEARCH
HAMMAMET
SOUSSE
AFRICA HOTEL
In addition to the well-known international CASABLANCA TUNISIA
hotel operators, several brands operating
DJERBA
DENSITY MAP
solely in Africa are actively growing their
MOROCCO
businesses. These include CityBlue, a
chain owned by UAE investor Diar Capital, AGADIR
which has opened hotels in four East CAIRO
African countries and has signed pipeline MARRAKESH ALGERIA LIBYA SHARM EL SHEIKH
deals in a further eight countries in East HURGHADA
and West Africa. Mangalis Hotel Group,
a subsidiary of Teyliom International, has MARSA ALAM
opened three hotels in West Africa and has EGYPT
ten pipeline projects in this region. Azalaï
Hotels Group has grown from its homeland
of Mali to have projects opened or under MAURITANIA
construction in most major West African CABO MALI
capital cities. VERDE SUDAN
NIGER ERITREA
Other groups that are growing in
prominence in Africa include Germany’s SENEGAL
Deutsche Hospitality, Spain’s Meliá Hotels THE GAMBIA CHAD
BURKINA DJIBOUTI
International and Switzerland’s Mövenpick FASO
GUINEA GUINEA
Hotels & Resorts. Asian hotel operators BISSAU NIGERIA
with projects under development in Africa SOMALIA
include Thailand’s Dusit International CÔTE GHANA SOUTH
SIERRA D’IVOIRE ETHIOPIA
and Minor Hotels Group. Middle Eastern LEONE CENTRAL AFRICAN SUDAN
groups active in the region include Rotana KEY REPUBLIC
LIBERIA
and Emaar Hospitality, which has projects Number of branded BENIN CAMEROON
and chain hotels ACCRA
in Egypt under its Address brand. LAGOS
TOGO
Most international hotel groups have EQUATORIAL GUINEA UGANDA
REPUBLIC KENYA
asset-light business models in Africa OF THE
whereby they usually operate, but do not GABON CONGO DEMOCRATIC
1 100+ SÃO TOMÉ & NAIROBI
own, their branded hotels. This creates PRINCIPE REPUBLIC RWANDA
Hotel Hotspots OF THE CONGO
opportunities for developers and investors BURUNDI
to either build or acquire properties
operated by the major chains. Long TANZANIA ZANZIBAR SEYCHELLES
construction times can be a significant
DAR ES SALAAM
challenge to brands seeking to grow their
African portfolios. To circumvent this, some
groups are pursuing growth strategies that COMOROS
prioritise the rebranding of existing hotels, FIGURE 3 FIGURE 4
rather than the development of new hotels. ANGOLA
Distribution of chain and branded Distribution of hotel development
MALAWI
As is the case in the rest of the world, hotels in Africa projects in Africa ZAMBIA
the growth of the Airbnb market has CENTRAL
CENTRAL CENTRAL
CENTRAL
AFRICA
AFRICA AFRICA
AFRICA
presented a disruptive challenge to
traditional hotel operators in Africa. While 22%% 44%%
99%% ZIMBABWE
still a very small part of its global presence,
MAURITIUS
Airbnb says that it now has 100,000 WEST
WEST NORTH MOZAMBIQUE
listings in Africa, accommodating 1.2
AFRICA
AFRICA
NORTH
AFRICA
AFRICA 29
29%% BOTSWANA
million guests in the last year. With the 38 WEST
WEST
38%% AFRICA
AFRICA NAMIBIA MADAGASCAR
hotel supply in many African cities being 21
21%% EAST
EAST
limited and slanted towards the luxury end AFRICA
AFRICA 35
35%% JOHANNESBURG
of the market, Airbnb accommodation NORTH
NORTH
AFRICA SWAZILAND
provides a cheaper alternative, AFRICA
particularly for younger travellers. The 5%% DURBAN
30
22%%rise of the Airbnb market has yet to have SOUTH AFRICA
99%% a discernible impact on African hotel SOUTHERN
EAST
EAST SOUTHERN
SOUTHERN
AFRICA
LESOTHO
SOUTHERN AFRICA
AFRICA AFRICA
AFRICA
AFRICA
performance, but it has demonstrated
that there is demand for new, flexible and
30
30%% 27 CAPE TOWN PORT ELIZABETH
27%%
affordable accommodation types across
the continent. 38 38%% Source: Knight Frank Research Source: Knight Frank Research Source: Knight Frank Research. Hotel numbers exclude safari camps and lodges, chalets and cruise-hotels. Data as at December 2017.
4 5HOTELS AFRICA 2018 RESEARCH
MAJOR HOTEL CHAINS IN AFRICA
MARRIOTT INTERNATIONAL TSOGO SUN MARRIOTT
LOUVRE HOTELS GROUP HILTON HOTELS & RESORTS
FIGURE 5 INTERNATIONAL
Africa hotel numbers by chain 149
149 20 96 7 41 13 39 14
Key Brands in Africa: Protea by Key Brands in Africa: Southern Sun, SUN1, Key Brands in Africa: Golden Tulip, Royal Key Brands in Africa: Hilton, DoubleTree
Marriott, Sheraton, Four Points by Garden Court, StayEasy Tulip, Tulip Inn, Sarovar by Hilton, Curio, Conrad
Sheraton, Le Méridien Selected Opening, 2017: SunSquare & Selected Opening, 2017: Golden Tulip Selected Opening, 2017: Hilton Cabo
Selected Opening, 2017: Four Points by StayEasy Cape Town City Bowl, South Africa Canaan Kampala, Uganda Verde Sal Resort, Cabo Verde
Sheraton Nairobi Airport, Kenya Pipeline Highlight, due in 2018: StayEasy Pipeline Highlight, due in 2018: Tulip Inn Pipeline Highlight, due in 2018: DoubleTree
Pipeline Highlight, due in 2018: Maputo, Mozambique Algiers Airport, Algeria by Hilton Kigali City Centre, Rwanda
Accra Marriott Hotel, Accra, Ghana The French-based but Chinese-owned Hilton is pursuing growth in Sub-Saharan
Tsogo Sun is one of South Africa’s largest
Marriott’s 2014 acquisition of the South hotel and leisure groups. Its portfolio is group’s African portfolio mostly comprises Africa through the conversion of existing
LS
TE hotels with the Golden Tulip brand. In 2017, hotels into Hilton-branded properties.
Africa-based Protea Hotels gave it the largely concentrated in South Africa, but HO
C OR 16 the group acquired a majority stake in the In 2017, it announced that it will invest
largest hotel network in Africa, which it has been expanding into the rest of the AC 1
was further expanded by its merger continent and the Middle East. The group Indian hotel company Sarovar, which has five US$50 million over five years to support the
with Starwood in 2016. The group also operates several Holiday Inn and hotels in Africa. conversion of around 100 properties.
has a target of having over 200 hotels InterContinental-branded hotels in
either open or in the pipeline by 2022 South Africa. INTERCONTINENTAL
and is looking to enter new markets HOTELS GROUP
including Benin, Botswana, Côte d’Ivoire, CITY LODGE
Madagascar, Mauritania and Senegal.
28 10
ACCORHOTELS 58 4
Key Brands in Africa: InterContinental,
Key Brands in Africa: City Lodge, Holiday Inn, Crowne Plaza
BE
ST
Road Lodge, Town Lodge, Courtyard Selected Opening, 2017: Holiday Inn
WE 4
ST
Mutare, Zimbabwe
2
116 20 Selected Opening, 2017: Town Lodge
ER
N
Windhoek, Namibia Pipeline Highlight, due in 2018:
Key Brands in Africa: ibis, Mercure, Pipeline Highlight, due in 2018: City Crowne Plaza Nairobi Airport, Kenya
Novotel, Sofitel, Fairmont Lodge Hotel, Dar es Salaam, Tanzania The InterContinental Hotels Group has a
Selected Opening, 2017: ibis Casa relatively modest African pipeline. Recent
TSOGO SUN
One of South Africa’s large hotel
Voyageurs, Casablanca, Morocco expansion has come through the opening
chains, the City Lodge group is now
96
Pipeline Highlight, due in 2018: Fairmont of the rebranded Holiday Inn in Mutare,
INTERCONTINENTAL
expanding into other markets in East and
HOTELS GROUP
Citystars Sharm El Sheikh, Egypt Southern Africa. Zimbabwe, a franchised property owned by
28
African Sun Limited.
AccorHotels’ presence in Africa is
spread across 13 brands, ranging from RADISSON HOTEL GROUP
midscale and economy operations such BEST WESTERN
as ibis and ibis Budget, to luxury brands
including Fairmont and Raffles. In 2015,
the group announced plans to open 50 42 20
hotels in Angola in partnership with the 24 9
local investor AAA Activos LDA; so far, Key Brands in Africa: Radisson Blu,
three hotels have opened under the ibis Radisson RED, Park Inn by Radisson Key Brands in Africa: Best Western, Best
Styles brand. Western Plus, Best Western Premier
Selected Opening, 2017: Radisson Blu,
N’Djamena, Chad Selected Opening, 2017: Best Western
HILT
RES HOTEL
Plus, Ibadan, Nigeria
39 S
O
Pipeline Highlight, due in 2018: Park Inn
N
ORT S &
by Radisson Luanda Kilamba, Angola Pipeline Highlight, due in 2018: BW
CIT 58
YL
Premier Collection The Alba, Nairobi, Kenya
OD
Radisson Hotel Group rebranded from
GE
Carlson Rezidor in early 2018. Its Radisson The comparatively small size of Best
KEY Blu brand has over 30 hotels in Africa, while Western’s African footprint partly reflects
the first African hotel using the Radisson the fact that its business model is
Number of hotels in Africa
RED brand opened in Cape Town in 2017. uncommon in Africa. It does not own or
Among its pipeline projects, the group has Source: Knight Frank Research. RADIS manage hotels; instead, independent hotel
S
Countries present in Africa SON OTEL owners operate Best Western-branded
signed an agreement to operate five new Data as at December 2017. GROU HOTEL RE H
P LOUV ROUP
Park Inn by Radisson hotels in Angola. 42 G hotels under licence agreements.
41
6 7HOTELS AFRICA 2018 RESEARCH
AFRICA HOTELS 2017 KEY PERFORMANCE
INDICATORS BY COUNTRY
FIGURE 7
Historical occupancy rates
FIGURE 8
Historical RevPAR performance
PERFORMANCE REVIEW
OCCUPANCY ADR REVPAR
% US$ US$
80% US$100
ALGERIA MOZAMBIQUE North Africa North Africa
Sub-Saharan Africa Sub-Saharan Africa
At a pan-African level, the hotel sector recorded a
48% 43%
steady improvement across all key performance 131 63 145 62 70% US$80
indicators in 2017.
BOTSWANA NAMIBIA
60% US$60
The overall African hotel occupancy rate, Africa, according to STR data. The Sub-
as reported by hotel data provider STR Saharan Africa Average Daily Rate (ADR) 57% 101 57 60% 88 53
Global, was 58.0% in 2017, up from was US$121.35 in 2017, a level which US$40
50%
54.9% in 2016. This was primarily driven compares well with most other global
by an improvement in the North African CABO VERDE NIGERIA
regions. However, this belies a large
occupancy rate, which rose by more variation in ADR across the countries of
than seven percentage points to 54.6%. Sub-Saharan Africa, and it reflects the 68% 87 60 46% 145 67 40%
US$20
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Occupancy rates across North Africa relative absence of budget and midscale
have been depressed in recent years,
hotels in the sample data. Source: STR Global Source: STR Global
partly due to the impact of heightened CÔTE D’IVOIRE SENEGAL
security concerns on tourism. However, At a country level, Mauritius and
the performance of 2017 indicates Seychelles were 2017’s top-performing FIGURE 9
59% 158 93 71% 147 104
that the sector is gradually recovering; markets, in terms of both occupancy and Key performance indicators, 2017
occupancy was at its highest level since room rates. Both markets are dominated
2010, but it remained substantially below
AFRICA
by luxury resort hotels, and have
EGYPT SEYCHELLES
the levels of a decade ago. been relatively immune to the security
In contrast to the volatility of the North concerns that have impacted resort
55% 66 36 73% 368 270
Africa region, occupancy in Sub- locations elsewhere in Africa. These
Saharan Africa has been steadier over two markets are expected to remain the
recent years, staying close to 60%. The continent’s top performing markets in
ETHIOPIA SOUTH AFRICA
Sub-Saharan region also consistently 2018, and they are increasingly popular
records higher room rates than North targets for investors. 58.0% US$62
54% 192 104 64% 92 59 US 107
FIGURE 6 +3.1% +2.1% +7.8%
Global hotel performance comparison, 2017 GHANA TANZANIA
OCCUPANCY ADR REVPAR
150 100 56% 157 88 54% 137 75
120 80 KENYA TUNISIA
55.0% US$46 60.0% US$73
US 83 US 121
48% 127 60 53% 66 35 +7.6% -7.9% +7.1% -0.3% +8.2% +7.8%
90 60 ADR REVPAR ADR REVPAR
ADR/RevPAR (US$)
OCCUPANCY OCCUPANCY
Occupnacy (%)
MAURITIUS ZAMBIA NORTH AFRICA SUB-SAHARAN AFRICA
60 40
Source: STR Global
80% 211 168 49% 127 62
30 20 GLOSSARY
MOROCCO ZIMBABWE
Occupancy %: The number of rooms sold as a proportion of available rooms for a specified time period
Average Daily Rate (ADR): A hotel’s total Rooms Revenue divided by the number of rooms sold during the period
0 0
AMERICAS ASIA-PACIFIC EUROPE MIDDLE EAST NORTH AFRICA SUB-SAHARAN
56% 114 66 55% 86 47
Revenue Per Available Room (RevPAR): The total Rooms Revenue divided by the total number of available rooms
AFRICA during the period
ADR RevPaR Occupancy (%)
Source: STR Global Source: STR Global
8 9HOTELS AFRICA 2018 RESEARCH
CAPITAL MARKETS OVERVIEW THE VIEW FROM THE GULF
The hotel sector is one of the most active segments of the African real estate
Additionally, large family groups involved In the past, North Africa has been a firm
investment market. in the hospitality sector are increasingly favourite with Middle Eastern investors,
looking at African countries – mainly due to historic and cultural ties, and this
A series of significant hotel transactions An example of a recent acquisition by a be increased opportunities for investors
Ali Manzoor concentrating on largely untapped is likely to remain the case for the time
have been completed in recent years. hotel operator is ONOMO’s purchase of and developers to target the budget Associate Partner, Hospitality and
markets within East and West Africa – as being. As North Africa is one of the key
These have involved a variety of investors Inn On The Square in Cape Town, which and midscale hotel segments. Emerging Leisure, Knight Frank Middle East
+971 56 4202 314 possible locations in which to deploy outbound destinations for Middle Eastern
including property funds building their was previously managed by aha Hotels formats such as apartment hotels, which
ali.manzoor@me.knightfrank.com capital, as previously preferred regional
African portfolios, international investors & Lodges. ONOMO has hotels in eight are still in their infancy in most of Africa, are tourists, recognisable brand names
seeking exposure to the sector and hotel African countries and has raised €106 another potential target for investors. markets have become unviable due to arguably offer easier market penetration.
owner-operators growing or restructuring million from two investors, CDC Group conflicts and geopolitical issues. Prime examples include Abu Dhabi-based
As is the case across all property sectors,
their African businesses. and CIC Capital, to support the expansion Eagle Hills’ 184-key Fairmont property in
the scarcity of investible hotel assets Overall, these investors are looking
of its African portfolio. Taimur Khan La Marina Morocco in Rabat, the Kuwaiti
One of the most visible investors in this presents a major challenge to global Senior Analyst, Development to take advantage of the undersupply
sector is Quantum Global, whose US$500 A hotel’s branding is crucial to its investors seeking to enter African markets. Consultancy & Research, of international grade hotels, Africa’s United Real Estate Company’s Assoufid
Knight Frank Middle East golf resort development in Marrakesh and
million investment vehicle QG Africa attractiveness to investors. Many have However, for those able to source the population boom and the expected
+971 56 4202 312
Hotel LP is targeting midscale to upscale a preference for assets that can be best quality stock, the sector offers taimur.khan@knightfrank.com exponential growth in travel and tourism Qatari Diar’s Anantara resort in south
business hotels in Africa. Its first two rebranded after purchase, rather than opportunities to acquire international- across the continent. west Tunisia.
acquisitions were the InterContinental hotels that are locked in to long-term standard properties. Hotel investments in
management contracts. Investors may feel Africa will be best suited to investors with In recent times, Africa’s growing From a Middle Eastern perspective, we are Finally, as the tourism profiles of East
Hotel in Lusaka and the Mövenpick
Ambassador Hotel in Accra. With a sale that they can gain value by moving a hotel long-term horizons, who can ride out any hospitality market has seen increased beginning to see something of an uptick African countries continue to grow
price of US$100 million, the latter was the to a higher-scale brand but, as the sector short-term volatility in the sector, and tap levels of investment from Middle Eastern in the activities of renowned investors – alongside various private-public
largest-ever single-asset hotel deal in Sub- matures across Africa, there will also into its future growth potential. hospitality groups. While some investors and developers building portfolios of partnerships particularly with Middle
Saharan Africa. have been driven to diversify their properties across key hospitality hotspots, Eastern behemoths such as DP World –
holdings due the slowdown in domestic particularly Morocco and Egypt in North we can expect increased investment from
Mara Delta, which was rebranded as
Grit Real Estate Income Group in 2017, markets, others continue to be active in Africa, as well as emerging locations in Middle Eastern investors into key markets
has been highly acquisitive across all both domestic and foreign markets. Sub-Saharan Africa. in this region.
commercial property sectors over the
last few years. It has gained exposure to
the hotel and hospitality sector through
HOTEL MARKET OUTLOOK
its purchase of stakes in four resorts in
Mauritius in two separate transactions.
Another major player in the sector is the
South African REIT, Hospitality Property Many of the continent’s largest cities oil economies and heightened security hotel supply in many African cities
Fund (HPF), which is majority-owned by continue to be challenging markets for concerns in North Africa, have shown is targeted primarily at affluent
the Tsogo Sun hotel group. Following its hotel operators entering or expanding that short and medium term risks can international travellers, there is space
purchase of 29 Tsogo Sun hotels in 2017, in Africa. New hotel developments are emerge. Developers, investors and
Mövenpick Ambassador Hotel, acquired by Quantum Global for US$100 million. Photo: © Mövenpick Hotels & Resorts in the market for midscale and budget
HPF owns 53 hotel or hospitality assets. regularly subject to protracted delays, hotel operators should weigh such risks
hotel brands catering more to regional
and there is an ongoing disparity against longer-term market prospects.
and domestic demand.
between the stated pipelines of major New hotel developments need to
Selected recent African hotel transactions hotel groups in Africa and their ability be well-timed, correctly located and Hotel operators will need to tailor the
Date Property Location Seller Buyer Price to open these projects on time. targeted at the right audiences. experiences that they offer to other
(US$) Nonetheless, there is considerable Travel to and within Africa has historically emerging audiences. Africa’s growing
Q2 2017 Tsogo Sun Portfolio South Africa (29 locations) Tsogo Sun Holdings Hospitality Property Fund 276m* economic ties with China, for example,
growth potential within the African been hindered by poor air connections,
Q4 2016 Mövenpick Ambassador Hotel Accra, Ghana Kingdom Holding Company Quantum Global 100m hotel sector, particularly outside of but these are gradually improving and are creating demand for hotel styles
Beachcomber Portfolio (44.4% Mara Delta (now Grit Real the relatively well-supplied markets of low-cost African airlines are emerging. that specifically appeal to Chinese
Q4 2016 Mauritius (3 locations) New Mauritius Hotels Limited 53m
stake) Estate Income Group) South Africa and North Africa. Even in Over the long term, a growing number tourists and business travellers.
Mara Delta (now Grit Real these markets, hotel supply levels are of destinations should become more
Q1 2017 Tamassa Resort Bel Ombre, Mauritius Néréide Limited 40m Experiential hotels, which aim to
Estate Income Group) small compared with North American accessible to international and intra-
immerse visitors into local cultures, are
and European countries, indicating African travellers, driving demand for
Q1 2017 Hyatt Regency Johannesburg, South Africa Investec Property Bin Otaiba Investment Group 36m another potential growth area.
that there is room for growth over the hotel rooms.
Q1 2016 InterContinental Hotel Lusaka, Zambia Kingdom Hotel Investments Quantum Global 35.9m
long term. As demand evolves and Africa’s hotel
Tourism flows within Africa will also
Q2 2017 African Pride 15 On Orange Cape Town, South Africa Blend Property Group Spear REIT 23m
While the long-term potential is be boosted by the expansion of the industry matures, an increasingly
Q1 2017 Umubano Hotel Kigali, Rwanda Rwandan Government/LAICO Madhvani Group 20m diverse range of opportunities will
evident, more transient trends such continent’s middle classes and reduced
Q4 2016 Inn On The Square Cape Town, South Africa Hospitality Property Fund ONOMO Hotel Group 11m as the recent slowdown in the major visa restrictions. As the current branded arise in the sector.
Source: Real Capital Analytics / Knight Frank Research *approx. US$199m in shares + US$77m in cash
10 11KNIGHT FRANK AFRICA
Peter Welborn
Managing Director, Africa
+44 20 7861 1200
peter.welborn@knightfrank.com
INTERNATIONAL RESEARCH
Matthew Colbourne
Associate, International Research
+44 20 7861 1238
matthew.colbourne@knightfrank.com
KNIGHT FRANK MIDDLE EAST
Ali Manzoor
Associate Partner,
Hospitality and Leisure
+971 56 4202 314
ali.manzoor@me.knightfrank.com
Taimur Khan
Senior Analyst, Development
Consultancy & Research
+971 56 4202 312
taimur.khan@knightfrank.com
Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide
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