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Africa’s Hospitality Withstands Economic Headwinds


South Africa’s hospitality sector is poised for further growth in the next five years bolstered by inbound travelers amid a difficult and volatile economic climate.

Pietro Calicchio, Hospitality & Gaming Industry Leader for PwC Southern Africa (www.PwC.co.za), says: “Africa’s hotel sector has remained resilient in the face of strong economic headwinds.”

PwC’s 7th edition of the ‘Hotels Outlook: 2017-2021’ projects that South African hotel room revenue will grow by 10.1% in 2017 to R17.5 billion. Overall hotel room revenue for South Africa is expected to expand at a 9.3% compound annual rate to R24.8 billion in 2021 from R15.9 billion in 2016.

PwC’s report features information about hotel accommodation in South Africa, Nigeria, Mauritius, Kenya and Tanzania. This year we take our African view a step further, with looking into Ghana and Ethiopia as emerging hotel markets.

The outlook for 2017 is positive with an increase in the number of international visitors to South Africa expected. Domestic tourism is also anticipated to increase by 2.2% in 2017.

Visits from China and India increased in 2016 as a result of the relaxation in the visa requirements; travellers from China to South Africa increased by 38% and India recorded a 21.7% increase. Of non-African countries, the UK is still the largest source of visitors to South Africa at 447 840 in 2016.

Of the African countries, the largest number of foreign visitors to South Africa in 2016 came from Zimbabwe at two million, followed by Lesotho at 1.8 million and Mozambique at 1.3 million. In addition, visits from East and Central Africa also rose by 11.2% in 2016.

It is promising to note a growing number of new hotels planned for the South African market over the next five years. The overall number of available rooms is expected to increase at a 0.9% compound annual rate, thereby adding 2700 rooms over this period.

Nigeria is expected to be the fastest-growing market from a revenue perspective over the next five years with a projected 14.7% compound annual increase in revenue, benefitting from an improving economy, continued growth in domestic tourism, and expansion in the number of available rooms.

South Africa is projected to be the next-fastest growing market with a 9.3% compound annual increase in room revenue, most of which will be generated by rising average room rates and continued but moderating growth in tourism.

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