Regional focus: Africa hotel RevPAR grows for 87 months in a row, says STR [Infographic]
An oasis of booming hospitality: Many of Africa’s 5,000 hotels are concentrated in hubs like Egypt, such as the Hotel Hurghada Resort pictured here. (Photo: by PublicDomainPictures from Pixabay)
Over twelve months, RevPAR was up 6.4% across Africa, a value many other markets can only dream of.
Revenue per available room (RevPAR), the key metric used to measure hotel industry performance, has grown for 87 consecutive months in Africa.
This is due to slow supply growth and strong demand in the African market, STR director Thomas Emanuel revealed in his presentation at the recent Africa Hotel Investment Forum (AHIF).
Looking at the reasons behind Africa’s impressive RevPAR growth
Using a 12-month moving average and U.S. dollar constant currency to remove the impact of currency fluctuations, STR determined that Africa’s RevPAR was up 6.4% to US$ 67.10 as of August 2019.
Experts consider the 3.3% growth in the average daily rate (ADR) across Africa as the main reason for higher RevPAR rather than the 2.9% boost in occupancy.
“Africa has shown one of the better supply and demand balances on a global level,” Mr Emanuel said.
“The continent’s industry continues to expand alongside rapidly developing economies and infrastructure, so there is a definite investment opportunity even though finding the right opportunity is challenging. The prospects of greater supply growth, as well as political and economic instability, can also create difficult situations for the region’s hotel industry moving forward.”
More takeaways from the AHIF 2019
Despite its massive geographical area, Africa has only around 5,000 hotels. Many of these properties are concentrated in hubs such as Egypt, Morocco, Tunisia and South Africa. Today, these are the only African countries with over 50,000 rooms.
To further grow supply, large international brands such as Marriott International and Accor are investing heavily in Africa. This has led to the number of countries without any globally branded hotels to decrease from 18 to seven within only six years.
While it remains a lesser-known destination internationally, Dakar in Senegal has recorded a steady RevPAR increased since 2017. The Summer Youth Olympics in 2022 are set to put the city on the map for more foreign travelers.
The upward trend is not spread across the continent uniformly though. While Addis Ababa has seen strong growth due to more corporate business and expanded air routes, a growing supply of hotels has had a slightly negative effect on properties in Nairobi, Kenya.
Morocco also experiences significant performance variance with Casablanca pulling down figures in an otherwise thriving hospitality market.
According to the TOPHOTELCONSTRUCTION online database, these are the top 10 countries in Africa: