Africa is a continent with as diverse resources as the people. In the Northern hemisphere, there lies the deserts and drylands, many with oil reserves worth billions. West Africa has its share of oil, with Nigeria being one of the key producers in the world.
Subsaharan Africa, commonly known as ‘black Africa’, where Kenya and East Africa lie has just discovered huge oil reserves. This is Africa, rich in untapped resources, under-utilised lands, plenty of manpower, numerous feuds and as critics like to point out, plenty of sleep.
Why sleep? Well, with the potential that Africa has, why is it by far the poorest continent, contributing less than three percent to the global GDP? It is indeed a sleeping giant.

But is the behemoth finally stirring? Latest analysis by STR Global, leading provider of data on the hotel industry, reveals that despite high levels of inflation and political uncertainty, Africa is proving that it is a growing tourist and business destination as hotels in a number of key markets are reporting performance increases for year-to-date June 2013.
“In spite of many unsolved problems, Africa shows a promising future. There is an increasing interest in a number of countries, particularly in sub-Saharan Africa where tourism is more developed,” says Elizabeth Randall Winkle, Managing Director of STR Global. Despite high levels of inflation, political uncertainty, and emerging terrorist threats, Africa, it seems, has not deterred hotel developers from being interested in the continent.
Reports from the recently concluded Africa Hotels Investment Forum 2013 (AHIF) held in Nairobi indicate that its popularity is likely to grow in the next 10 years given the wealth of resources and abundant untouched areas. “Africa is a key growth market with plenty of exciting prospects ahead.
The current undersupply of hotels, as a result of the continent’s natural resources boom and a growing middle class, means there are plenty of opportunities for internationally branded hotels,” said Mr Mark Willis, Area Vice President Middle East and Sub-Sahara Africa, The Rezidor Hotel Group. “Our development strategy is on track and over the next 24 months, we will open more Radisson Blu and Park Inns by Radisson properties in cities including Nairobi, Freetown, Kigali, Libreville, Marrakech and Hammamet,” he added.
However, a scrutiny of the regional performance paints a not so favourable bias towards East Africa’s hotel construction industry. Research released by W Hospitality Group, a founding member of Hotel Partners Africa (HPA), reveals that there are 40,000 rooms being planned or constructed on the African continent from now to 2017. The top city for construction is Lagos, Nigeria, which has 4,080 rooms in development.
This is followed by two Egyptian destinations, Cairo, with 2,843 rooms and Hurghada with 2,221 rooms. Nairobi is ranked seventh with 1,437 rooms and Addis Ababa, the only other East African city lying 14, with 1,019 rooms. According to delegates at the AHIF, a big barrier for Africa more so East Africa’s tourism and by extension hotel development is the lack of transportation infrastructure.
Even though some low-cost air carriers have emerged over the last decade, only a small percentage of airfields are paved and airlift remains limited due to high operating costs. “Africa’s railway infrastructure is not without its own set of challenges due to limited interconnected rail systems as most of the national rail systems operate independently.
Non-standardised gauges, break systems and traction and obsolete equipment further compound the situation,” says Elizabeth Winkle of STR group. It is interesting to note that despite the Westgate Mall attack in Nairobi, an event that was supposed to cripple the country by shaking investor confidence, the delegates at the forum were upbeat, terming the terrorists attack as inconsequential to their investment plans.
“Terrorism is is not unique to Kenya considering that terrorists have no borders. It is a global issue and does not dampen our resolve or dull our interest or intent to invest in the country,” said Mr Denis Sorin, the Chief Executive Officer of Mangalis Management Group, the hospitality management arm of the Inaugure Hospitality Group.
Sorin, while insisting that Kenya is the place to be, says that his company will be establishing a hotel in Kenya in the coming few years as part of the group’s strategy to reach the 40 plus properties milestone by 2015. “The brands developed by Mangalis Management Group aim at placing for the first time ever Africa on the world map of home-grown pioneering hospitality companies, and change the way guests, hoteliers and investors alike are doing business across the African continent and beyond,” he said.
Ms Marianne Ndegwa Jordan, CEO, Kenya Tourist Development Corporation declared that the conference succeeded in focusing the world’s attention on the investment opportunities in tourism available in Kenya and Africa as a whole. “Kenya has now been positioned as an investment hub for the African continent. This is evident from the commitment shown by leading brands in putting up hotels in Nairobi and other parts of the country.
These include leading operators like Emaar, Kempinski, Marriot and Radisson Blue among others.”
 Her view was mirrored by the private sector, with Mr Trevor Ward, CEO, W Hospitality Group, saying he expects Africa to attain an even higher profile in terms of opportunities for hotel development, “with investors recognising that risk can be managed, with the profits in Africa second to none globally”.
Mr Bani Haddad, Regional VP – Middle East & Africa, Wyndham Hotel Group concurred. “We are very excited about the development opportunities in Africa for 2013. We are seeing a lot of activity, especially in East Africa. We believe that a number of very exciting projects will open next year in that area,” said Haddad.
What is it about Africa that is spurring such enthusiasm? In a word, growth. Economic growth in Africa is averages six percent, several times higher than that in many highly developed Western economies, “Africa is the next market we should be in. It’s a growing market, international hotel companies are under represented and returns are high,” said Haddad.
The World Bank is currently financing 1,091 activities in 6,277 mapped locations in Africa worth US$49.3 billion (Sh4.3trillion). With a billion people, the majority of whom are Gen X and Y (born after 1966), seven of the top 10 fastest growing economies in the world and very low penetration by branded hotels, the opportunity for the hospitality industry to support the demand for travel is high.