Hospitality market in upward swing as investors plan 30,000 additional rooms

In the course of the next few years, investors shall be putting additional 30,000 rooms into Nigerian’s growing hospitality industry which, a couple of years ago, was estimated to be worth $49.9 billion with $203.7 billion in untapped potential  and  $253.5bn market size.

By the last count, about 20 hotel groups with 34 brands will be making this happen as part of renewed interest in, and growth of hospitality industry in Sub-Saharan Africa, especially Nigeria, which presents investment opportunities in key sectors given its sheer size and potential.

“Africa is booming and with this growth, the continent’s cities are experiencing an influx of residents in search of work and better standards of Living”, says Abimbola Olashore  of Lead Capital Plc, explaining that  the Eurozone crisis and slowdown in growth have weakened advanced economies from their strong position as investment destination.

“It is Africa’s potential to offset the sluggishness in more developed markets that’s appealing to global players,  explains Andrew McLachlan, Carlson Rezidor Vice President for Africa and Indian Ocean Islands.

“What has really happened is that post the economic crash in 2008/2009, the rest of the world has really woken up to Africa,” says McLachlan, adding, “there’s been such good news coming out of Africa from a GDP growth point of view, showing better telecommunications, improved security, political stability, and improved airlift; it’s really become a sort of new scramble back into Africa.”

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Analysts say the present trend is driven by travel and business, also noting that Africa, particularly Nigeria, is a growth phenomenon of the 21st century. “Whereas the rest of the world is growing at 3.3 percent, Africa at 5.5 percent, Nigeria’s GDP is growing at approximately 7 percent”, Michael  Chu’di Ejekam, Director, Real Estate in Actis, explained to BusinessDay in an interview.

Because of these opportunities, from Lagos and Kigali to Nairobi and Johannesburg, the world’s best known hoteliers are targeting Africa’s growing urban centers to benefit from a rising number of business travelers and a huge undersupply in available rooms.

Patrick Fitzgibbon, Hilton Worldwide’s senior vice president of development for Europe and Africa, notes that “there’s a growing demand in these capital cities because they are the centers of business, of government and of commerce –all of which have hospitality needs”.

The Nigeria market remains a focal point for Africa-bound foreign investments and this is understandable from the standpoint of the country’s demographics, fast-paced urbanization, growing middle class with strong spending power, rich oil resource and its status as a trading economy.