The African economy grew by an estimated 2.9% in 2019, outpacing GDP growth in each of the EU’s five biggest economies (Germany, France, UK, Italy and Spain), and its expansion is projected to accelerate to 3.2% in 2020 and 3.5% in 2021, according to the UN. Economic growth helped tourism flourish, with many segments of the hospitality sector seeing considerable development.  

1. Leisure tourism is on the rise

While the corporate and MICE sectors have been long key contributors to growth, Africa’s leisure tourism has also started to pick up as travel advisories were lifted for many of its countries and visa procedures became simpler in major inbound markets. International tourism is expanding by 5% annually, including a 6% growth in Sub-Saharan Africa, which translated into about 70 million international tourist arrivals in 2019. Growth is expected to continue in 2020, thanks to an increasing number of direct flights from Europe, America and Asia as well as a stronger promotion of exciting experiences on the continent.  

2. Demand up for health offerings

Health and self-care products and offerings have been in demand from business travellers, but they are significantly gaining popularity among leisure tourists as well. Various experiences, like full-week health retreats, quality spa offerings with massages, treatments and amenities, healthy food options or simply experiencing the beauty of untouched nature, are all drawing customer interest. Investors and hospitality brands need to keep this growing demand in mind when developing new properties.

 

3. Sports tourism set to expand

Africa is an amazing playground for professional athletes and sports lovers who seek adventures and outdoor activities. There is a wide range of options from cycling, hiking and mountain climbing to white-water kayaking, surfing and scuba-diving. This year is expected to see sports tourism grow as leisure tourists are opening up to Africa and countries in the continent are starting to actively promote sports experiences. Hotels will need to adapt their offers to this trend by providing sports facilities, storage rooms for equipment, gear rental services as well as post-workout amenities for athletes, such as quality spas with sport-related treatments and healthy options on the menu. Sports tourism will help hotels offset the low-season gap as many sports events take place during the winter. Operators should also take these new potential guest segment into consideration when drawing up development and renovation schedules.

4. Lifestyle brands shake up hotel markets

International and local operators have long given priority to standardized brands, providing assurances of quality and security to corporate customers. However, tourists arriving in Africa want more in 2020. They seek local experiences and look for opportunities to dive into African culture, food sports, arts, nature and social activities. Tourism is becoming a way to connect with local people and culture. Affordable luxury and lifestyle brands are gaining ground and tend to be as successful, if not more, as standardized hotels. Radisson Hotels has opened its second Radisson Red unit worldwide in Cape Town and Accor’s MGallery brand is quickly penetrating African markets. Accor has also introduced Mantis Collection, a luxury lifestyle lodges brand, to offer real African experiences.

5. Sustainability to become more important 

The sustainable operation hasn’t become a must-do for many African hotels, but tourists are more environmental-conscious in 2020, partially after recent events, like the water crisis in South Africa and the fires in Australia. Sustainability is becoming an important factor visitors consider when making bookings. Is the hotel environmentally friendly? Does it offer green in-room options or local food? Developers and operators must also consider these questions as customer expectations change.      

Energy-efficient lighting, environmentally friendly waste management and solutions to reduce carbon footprint are already in place, but green initiatives should be pursued further. Newly built hotels should add more green features, such as solar panels, grey-water usage systems, rainwater catchment tanks and reusable containers. Relying on the local supply chain should be also part of a hotel’s operation. While sustainability requirements could increase construction costs and initial investment, eco-friendly solutions may also offer opportunities to cut operation costs.

6. Smart solutions to emerge in hotel tech

Technology is increasingly used in African hotels to improve the guest experience before, during and after a stay. Customers are seeking smart experiences, from automated check-in to enhanced booking experiences, in-room technology and interactive communication. Smartphones may become our new hotel key and in-room technology may help personalize services to the smallest details. Hotels need to adapt to remain competitive and take serious measures to ensure the security of client data. These new experiences will only be possible with strong economics and tight management processes in operating models.

7. Economic models are changing

Africa is a challenging market, with macro- and microeconomics playing an important role in the profitability of the local market. For example, exchange rates have a huge impact on revenue, profit and return on investment. Hotel operators need to be innovative to reduce their costs. Becoming a ‘green’ hotel may reduce energy expenses, but is not sufficient, and managers need to look at other options to cut overall costs – for example, by transforming their supply chain. Marketing is becoming more efficient with social media and influencers playing an increasing role in promotion. These changes could allow hotels to decrease their reliance on OTAs and tour operators, which would result in lower commission expenses. Another way to save costs is to enhance education and training: most brands have started reducing the number of foreign expats in their teams and educating local staff instead, which also supports local communities.

8. New hotel management contracts  

Lease contracts and old-school management agreements have been dominating Africa’s hospitality markets, but new contracting types are emerging as the hospitality industry evolves. Third-party management, franchise and creative management agreements are on the rise. Dual-branded hotels are becoming popular, as investors and developers are looking to target wider audiences and reduce expenses by creating hubs and economies of scale. Investors give priority to flexibility, allowing brands to drive more revenue and contribute to building up ROI. Multi-hotel contracts are common: owners sign for multiple hotels to make financial gains and creating a stronger relationship with the brands. Brands are ready to invest more key money in exchange for higher fees and contract negotiations are becoming more and more important.

About the author:  Laura  Dutrueux, RLA Global Africa Managing Director    

Laura is the Managing Director of the RLA Global Africa office based in Cape Town.   Since 2015 she has worked across most of Africa representing owners, developers and investors with feasibility studies, valuations, conceptualisation, renovation and improvement plans and operational consulting services for various hospitality and leisure assets as well as upscale and luxury residential developments.  Her strong knowledge of the African markets is combined with a strategic and creative approach to the tourism and leisure industry.

 

News relating to this topic

IHIF One-to-One with Club Med's President

Sep / 2021

RLA Global's, Group CEO talks 'Reinventing Travel and the Resort Company with the Club Med President

IHIF One-to-One with Club Med's President

Sep / 2021

RLA Global's, Group CEO talks 'Reinventing Travel and the Resort Company with the Club Med President Read more

news-article

AHIC - The ROI that wellness can add to your property.

Sep / 2021

Paul Boldy, Managing Director of RLA Global, Middle East took to the stage, at AHIC, last week to talk about a subject that is an integral part of RLA Global’s DNA.

AHIC - The ROI that wellness can add to your property.

Sep / 2021

Paul Boldy, Managing Director of RLA Global, Middle East took to the stage, at AHIC, last week to talk about a subject that is an integral part of RLA Global’s DNA. Read more

news-article

Insights relating to this topic

Growing Investor Interest In Resorts And Leisure Assets

Sep / 2021

Increased investor appetite for resorts and leisure properties have resulted in several acquisitions in in recent months. What makes these products attractive and will their current appeal last?

Growing Investor Interest In Resorts And Leisure Assets

Sep / 2021

Increased investor appetite for resorts and leisure properties have resulted in several acquisitions in in recent months. What makes these products attractive and will their current appeal last? Read more

news-article

Wellness Real Estate Report Insights into F&B Performance

Sep / 2021

RLA's head of EMEA hospitality advisory makes a closer inspection of the F&B and the data findings of the Wellness Real Estate Report

Wellness Real Estate Report Insights into F&B Performance

Sep / 2021

RLA's head of EMEA hospitality advisory makes a closer inspection of the F&B and the data findings of the Wellness Real Estate Report Read more

news-article
Meet Laura Dutrieux

Learn more about the author

Insights relating to this topic

Growing Investor Interest In Resorts And Leisure Assets

Sep / 2021

Increased investor appetite for resorts and leisure properties have resulted in several acquisitions in in recent months. What makes these products attractive and will their current appeal last?

Growing Investor Interest In Resorts And Leisure Assets

Sep / 2021

Increased investor appetite for resorts and leisure properties have resulted in several acquisitions in in recent months. What makes these products attractive and will their current appeal last? Read more

news-article

Wellness Real Estate Report Insights into F&B Performance

Sep / 2021

RLA's head of EMEA hospitality advisory makes a closer inspection of the F&B and the data findings of the Wellness Real Estate Report

Wellness Real Estate Report Insights into F&B Performance

Sep / 2021

RLA's head of EMEA hospitality advisory makes a closer inspection of the F&B and the data findings of the Wellness Real Estate Report Read more

news-article

News relating to this topic

IHIF One-to-One with Club Med's President

Sep / 2021

RLA Global's, Group CEO talks 'Reinventing Travel and the Resort Company with the Club Med President

IHIF One-to-One with Club Med's President

Sep / 2021

RLA Global's, Group CEO talks 'Reinventing Travel and the Resort Company with the Club Med President Read more

news-article

AHIC - The ROI that wellness can add to your property.

Sep / 2021

Paul Boldy, Managing Director of RLA Global, Middle East took to the stage, at AHIC, last week to talk about a subject that is an integral part of RLA Global’s DNA.

AHIC - The ROI that wellness can add to your property.

Sep / 2021

Paul Boldy, Managing Director of RLA Global, Middle East took to the stage, at AHIC, last week to talk about a subject that is an integral part of RLA Global’s DNA. Read more

news-article

Schedule a meeting

Tell us your preferred time to call or any details

Thank you! Your message has been delivered.

Laura Dutrieux

RLA Global Hospitality Advisory EMEA, Managing Director

Interested in related topics?

Sign up for our eNewsletter

Thank you for subscribing!

search