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Africa’s top and bottom 5 hospitality investment markets unveiled

by | 16 Oct 2019 | News

Africa is home to one of the world’s fastest developing hospitality markets. (Photo: Dan Grinwis from Unsplash)

Africa hospitality investment expert Wayne Troughton reveals where hoteliers and investors should look to next.

Just in time for the 10th annual African Property Investment (API) Summit, one of the industry’s leading experts shared insights on the top and bottom 5 hospitality investment markets in Africa.

We find out which markets he recommends investors look into and which ones they should avoid.

Hospitality investment trends in Africa

Wayne Troughton, one of Africa’s leading hospitality investment experts, has revealed some of the main investment trends in Africa’s hospitality sector.

“We are tracking investment from structured funds, predominantly from Europe and the Middle East; an increasing percentage of High Net Worth Individuals from Europe, the Middle East, and Africa itself, owner operators who invest from Europe, Africa and the USA, as well as Family Offices from the Middle East, the UK, Europe, and South Africa,” Mr. Troughton explained.

He further outlined that today, the most popular investment opportunity is a midscale business hotel of at least 150 rooms set close to corporate offices, conference centres and transport hubs.

However, trophy assets in prestigious locations such as by the Victoria Falls or other landmarks are also popular among a certain class of investors.

Top hospitality investment markets in Africa

According to Mr. Troughton, there are markets that savvy investors should get into sooner rather than later.

In West Africa, Troughton recommends Abidjan, Dakar, Cape Verde and Accra. In East Africa Kampala, Addis Ababa, and Dar es Salaam offer the best outlook.

Addis Ababa, for example, currently boasts the continent’s best average daily rate (ADR). Kampala is interesting since it offers a very limited supply of branded hotels but experiences high demand, a situation strategic investors could benefit from.

Challenges in the African hospitality market

Despite the growth the African hospitality market has experienced in recent years, it still faces considerable challenges that have kept it from growing even more rapidly.

For example, Mr. Troughton cautions that the market remains challenging due to a lack of forex, which results in developers battling to complete their hotel developments.

He also explains that a lack of direction in policies governing the private sector can make it more difficult for investors to realize their projects.

These issues apply in markets such as Bamako and Niamey in West Africa. East African Markets Mr. Troughton suggests investors avoid are Kigali and Nairobi since both cities currently suffer from an oversupply of rooms.

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