Uche Ejiofor
The growing number of visitors to Africa in the last four years has had a positive impact on the continent’s hospitality industry. This may explain the rapid expansion programmes hotel brands operating on the continent – both international and indigenous – have been embarking on in recent times. The aim, obviously, is to utilize opportunities these visits present for business in the industry.
Records show that in 2016, there were 58 million visitors to the continent on business and leisure. The figure rose to 63 million in 2017; 67 million in 2018 and over 70 million in 2019. The number of visitors is likely to go higher at the end of 2020, and will continue the progressive trend after the African Continental Free Trade Agreement (AfCTA) would have become operational from the middle of the year to make the continent the world’s largest free trade area involving 55 countries with 1.3 billion people.
There will also be increase in travels by Africans within the continent as national borders are removed to enhance intra-African movement, business, trade and commerce. At the moment, even without AfCTA, about four in every 10 travelers within the continent are said to be Africans. There is a likelihood of an increase in this number when the continent becomes one free trade area with relative ease of movement by Africans and those from outside.
From an economic point of view, the expected AfCTA-spurred increase in trade and commerce will raise the continent’s GDP currently put at $2.4 trillion. It will also go a long way in reversing the current trend whereby trade between African countries and European, Asian and American countries is far higher, in some cases up to 35 per cent, than those among countries on the continent. At the moment, intra-African trade stands at 16 per cent.
In obvious anticipation of increased investment opportunities in the industry, hospitality operators in Africa are not only strengthening their presence in markets where they are strong, but are also exploring prospects in new areas. Thus, we see international and indigenous hotel brands in sub-Saharan Africa expanding outside South Africa and East Africa where the tourism industry is very vibrant into new areas in West Africa where there is a growing interest by investors and hotel customers.
For instance, Marriot, one of the world’s leading hotel brands, has been on an expansion programme that would see it increase its portfolio on the continent, outside South Africa where it has a foothold, by 50 per cent, come 2023. This programme has been aided by its acquisition of Protea, the previously South African-owned hotel that was the leading indigenous brand before now. In the last three years, Hyatt has been on an expansion drive that is aimed at doubling its presence on the continent by the end of this year.
Indigenous African hotels are not left out of this expansion drive. The hotels involved are mostly South African and Kenyan-owned. Leading the scramble are notable names like Tsogo Sun, the South African hotel group that took over from Protea as the number one indigenous brand on the continent. The group is seeking to expand beyond the 90 hotels and casinos it currently operates in its home country and other parts of Africa. It has been operating in Nigeria where it runs the Southern Sun Hotel in Ikoyi, Lagos. Legacy Hotels, another South African brand, is also looking beyond its territory and the East African sub-region.
The Icon Hotel Group Africa (IHGA) and Serena, two of Kenya’s leading hospitality groups, are looking in the direction of West Africa for expansion. The IHGA, which combines delivery of world class services in its hotels with management consultancy, had since berthed in Nigeria where it handled the turnaround of Best Western Hotel on Victoria, putting it in good stead to compete with the best in the country.
The hotel group is trying to make its present felt in Benin Republic, where it is currently involved in the development of Best Western Premier Breeze Hotel, a $30 million, five-star hospitality outfit which it will finance up to completion and also manage when it becomes operational.
With the expectation of a boom for the hospitality industry when AfCTA comes into place, one area hotel brands will need to explore further with a view to increasing their involvement is safari. As more people visit Africa, and as Africans travel more within the continent for business and tourism, interest in safaris and game reserves will grow. This interest will increase the economic fortunes of east and central African countries as well as South Africa, where safaris and game reserves exist – countries such as Kenya, Tanzania, Botswana, Rwanda and Namibia.
In Nigeria, the Yankari Game Reserve in Bauchi State, once a heaven for local and international tourists, has remained a shadow of its former, barely recording up to 20, 000 visitors annually. Nigeria, which caused a near stir on the continent with its initial refusal to sign AfCTA but changed its mind along the line, stands to benefit immensely from the agreement when it becomes operational.
With the current expansion of the presence of international and African hotel brands in Nigeria, it will be in the country’s interest for the once vibrant tourism site to be revived. A recent report on Channels Television lamented the neglect of the game reserve and complaint of its managers about lack of accommodation for visitors to the site. The expected coming into existence of AfCTA should be a wakeup call to relevant authorities to bring the reserve back to life, if the nation’s tourism industry is to join other countries in deriving economic benefits from the agreement.
The hospitality industry is said to have contributed $194.2 billion to Africa’s economy in 2918. With AfCTA in place, the figure is bound to go higher.
Ejiofor, a development economist, writes
from Abuja