Zenith

Yudala

Featured post

Bank of Industry and fraud within

Commentary@ITREALMS:  There is massive corruption in the Federal government's Bank of Industry (BoI). The fraud runs into bill...

Tuesday, November 14, 2017

Nigeria, Senegal, Cape Verde dominate West African hotel industry

Nigeria, Senegal and Cape Verde have described as the top three dominating the West African hospitality industry, with over 114 hotels and 20,790 rooms, reports ITRealms.

According to the W Hospitality Group’s 2017 Hotel Chains Pipeline report, the West Africa region is at the heart of the continent’s growth and economic transformation in recent years.
ITRealms reports that notwithstanding the sharp slowdown experienced in 2016 and 2017, the region’s economy is expected to rebound in 2017 onwards.

The commodity-based economies, like Nigeria, ITRealms gathered, are slowly recovering from the fall in oil prices and oil production, while countries like Côte d’Ivoire, Mali, and Senegal have shown economic resilience and sustained growth.

The report also noted that as many of the countries continue to stabilize politically and economically, the region will be better integrated from a local and international context. This increased integration raises the need for quality travel and accommodation infrastructure.

Experts equally see the growth of the hotel sector as an important indicator of how well the market is developing its travel infrastructure, and the indicators for West Africa are mixed.

ITRealms pointed out that the 114 hotels and 20,790 rooms, accounted for 42 per cent of the sub-Saharan African hotel pipeline.

However, of these hotel deals signed and planned, only approximately 9,875 rooms, or 48% have moved to construction. In addition, projects in the region have longer than average development periods at approximately six years, compared to the two- to three-year development program that is usually planned. Some of the reasons for these delays are high capital investment required, lack of access to adequate financing options, limited access to raw materials, high construction and material costs, a heavy reliance on importation, inadequate technical capacity to manage the development program, and other barriers to entry.

Within the West Africa region, Nigeria, the report showed, contributes 49.6 per cent or over 10,000 hotel rooms in 61 hotels.

“Nigeria is also the top market in Africa for planned rooms,” part of the report read.

The other substantial markets in West Africa include Cape Verde with 11 hotels and 3,478 rooms, and Senegal with 14 hotels and 2,164 rooms. These three markets contribute a total of 15,955 hotel rooms, or 77 per cent of the West African hotel pipeline.

Approximately 57 per cent of the pipeline in these countries have moved to site, however some of these projects have been stalled for some time. In a country, like Nigeria, this can be significant. For instance, 40 per cent of Nigeria's pipeline was signed between 2009 and 2014, and as the chart above illustrates, a large portion of these projects is still in the "planning" phase. In Senegal only approximately 44 per cent of the deals signed have moved to site.


The pipeline of hotels to the sub-region, therefore, is encouraging and indicative of strong investor interest, the low completion rate of projects could be troubling for the development of the hotel sector. It is also difficult for the hotel chains whose expansion plans in these markets rely on partnerships with local and foreign investors to develop these hotels. All the major global hotel chains have strong expansion plans to increase their operating presence on the continent, and in West Africa.

Ogochukwu Nebenanya/GEE

ITREALMS ... everything news digitally!

No comments:

ICT4D Week 2018