The launching of new branded hotels in Africa has widely been delayed due to the pandemic. There has been quite a huge backlog across Sub-Saharan Africa since the pandemic hit in 2020. In Western Africa, Eastern Africa, and Southern Africa, several new accommodation facilities were in limbo as the pandemic rages on. There were notable new additions in the region, a sign of what the industry expected post-Covid.
Mid last year HTI Consulting, located in Cape Town and Africa focused hotel and tourism industry consulting specialist, did a survey and presentation as part of one of its virtual Hotel Club Events. The presentation titled unpacks the impact of Covid 19 on the African branded hotel industry.
“The presentation provides an overview of the branded hotel development pipeline in East, West, and Southern Africa and how this has been impacted by COVID with regards to opening and construction delays in each region,” HTI Consulting CEO Wayne Troughton commented.
“In addition, there is the insight into hotel owner’s sentiment towards the industry and whether that had been impacted by COVID. The presentation covers data from 14 regional and international hotel operators”, he says.
His company is one of the few bespoke consulting firms operating within the African hospitality industry, and a full-service hospitality advisory and brokerage consulting company that in the last 17 years, has conducted over 450 assignments in 45 countries in Africa and the Middle East.
Data input and insights presented in the survey were provided directly by various operators active in the African hospitality space and not owners. A total of 14 regional and international operators responded, with all findings having been aggregated for the presentation, representing 41 brands in 219 projects.
Hotel brands covered in the survey were Hilton, Marriott International, IHG InterContinental Hotels Group, Best Western Hotels & Resorts, Accor Hotels, Radisson Hotel Group, Four Seasons, Sarovar Hotels & Resorts, Wyndham Hotels & Resorts, Louvre Hotels Group, Valor Hospitality Partners, Rotana, Icon Hotel Group and Aleph Hospitality.
The report detailed exiting data on what operators said with regards to which of the 219 projects were proceeding and which ones were on hold. About 45% of these were in the planning phase, with the remaining 54% under construction.
Of the total projects, 68% of all planned supplies proceeded, against 18% that were ‘on hold for a limited period’, and 13% of planned supplies being held ‘indefinitely’.
Seventy-five percent of supply under construction was proceeding, 18% of supply under construction was on hold for a limited period, and supply under construction on hold indefinitely stood at 7%.
Of the total project whose opening and construction was delayed due to Covid, 45% were in planning phase compared to 54% that were under construction.
Hotel projects that delayed opening due to COVID 19 included 40% that experienced no change to delivery date at the stage they were at the time, 26% that suffered delays of between 3 to 6 months, and 12% that had delays of between 9 and 2 months. Others went through delays of 9 to 12 (8%) with 14% exposed to delays of more than 12 months.
Almost 70% of projects experienced construction delays of between 3 and 12 months, while 30% of projects that were under construction had no change of delivery date.
According to the surveyed operators, market entries for 2020 numbered 21 projects, amounting to 2496 hotel rooms that were projected to still enter the market in that year. In these projects, 52% had been delayed by between 3 to 6 months. Surveyed operators were based in countries spread out across Africa, and these were South Africa, Nigeria, Ghana, Ethiopia, Mali, Mauritius, Cameroon, Tanzania, Kenya, South Sudan, Cape Verde, and Reunion.
About 57% of current hotel owners said they had not changed their sentiment towards the hospitality industry with medium to long-term sentiment remaining favorable.
But concerns were still apparent, such as uncertainty around travel ban lifts in various markets, how to restore guest confidence going forward, how will COVID impact hotel valuations and the availability of finance and banks’ willingness to invest in hospitality projects.
Development during lockdown saw some encouraging activity as deals were signed during the lockdown period between March and June 2020. A total of 15 new hotel deals were signed by 7 operators in 8 key African countries spanning the Western, Eastern, and Southern regions.
The overall Sub-Saharan Africa development pipeline covered 33,698 hotel rooms and 38 markets. West Africa was the highest at 47% of total supply, 84 branded hotels, and 15,819 hotel rooms, followed by East Africa’s 40% of total supply, 88 branded hotels, and 13,257 hotel rooms, with Southern Africa’s tailing at 23% of total supply, 47 branded hotels, and 7,822 hotel rooms.
Further West Africa development pipeline overview showed that there were 84 branded hotels, 15,819 hotel rooms, and 719 rooms that had still been planned to enter the market in 2020. Nigeria, Ghana, Ivory Coast, Cape Verde, Senegal, Benin, Cameroon, Liberia, Mali, Sierra Leone, and Niger made up the national markets. In the same markets, 59% of planned supplies were expected to proceed, 19% of planned supply was said to be on hold for a limited period. An estimated 22% of planned supply was on hold indefinitely. In the same countries, delays in opening due to Covid were at 43% for those with no change to the delivery date, 23% projected delays of up to 6 months, 14% (up to 9 months), 3% (between 9 to 12 months) and 17% were expected to be delayed by more than a year.
In Southern Africa, the development pipeline overview showed 963 rooms were planned to enter the market in 2020, in South Africa, Zambia, DRC, Angola, Botswana, Mozambique, Namibia, and Malawi. 87% of planned supply went expected to be going ahead, 6% were said to be on hold for a limited period, while another 6% were held indefinitely. Opening delays due to Covid were at 32% having no change to the delivery date, with 445 delayed by between 3 to 6 months, 8% delayed by between 6 to 9 months, and 8% delayed by 9 to 2 months, and another 8% experiencing delays of beyond 12 months.
Troughton’s presentation noted that hotel owners’ sentiment at the time of the survey remained positive, boosted by a healthy development pipeline that was still planned to enter the market. Operators were said to have innovated and adapted to streamline processes and were taking a “wait and see” approach over the 3 to 6 months that followed to the end of the year. It was also noted that hotels remained a long-term investment, complemented by new opportunities that were still viewed aplenty – new owners using that time to finalize planning and engage with professional teams.
Outside the branded hotels sector, the pandemic has also delayed the completion of the Muzimu Tented Camp whose construction has been progressing for the past few years in Mozambique’s Gorongosa National Park.
The camp was projected to complete construction by the end of August 2020, if all had gone according to plan and would have opened in the last quarter of the same year. Before Covid 19 hit, construction was said to be about 60% complete with the remainder of the furnishings and decor needing to be incorporated into the completion – which was expected to take up most of the year.
Costing about US$1, 5 million on completion, it will consist of 6 stylishly designed and decorated luxury tents. Each tent is elevated on its platform with its view of the Muzzicadzi River. The main area is a combination of the lounge and dining room area and is situated within the center of the camp. This boasts a large communal area with lounge and dining facilities which expands onto a sweeping deck, outsider shaded under natural trees. The entire structure is raised off the ground, thus elevated in the tree canopy set alongside the river and the encompassing views.
The decor is not the typical colonial style but rather a fusion of modern and a strong thread of Mozambique colours and vibrant textures to accompany. The camp is to showcase the people and the colours of the country and its people alongside the famous Gorongosa National Park. The lodge is unfenced and open to the wild and provides a safe retreat on the elevated walkways and tent structures to guests. It is the first of its type to be erected and designed in the park.
Muzimu Tented Camp is described as the first of its stylish tented style type, setting a benchmark in the industry and will be complemented by the rich wildlife experiences and encounters, making this a first in the tourism industry in Mozambique. It is believed it will pave the way for other safari camps to grow in style and luxury and to create a standard for discerning travelers to visit.
Matthew Jordan, Director – Sustainable Development, Gorongosa Project and CEO, Our Gorongosa, said, “By September of this year we want to open our new camp, Muzimu Tented Camp, in the heart of the Gorongosa National Park.”