Lagos and Accra with the highest occupancy growth rates in Africa

19 March 2018 Authored by Consultancy.africa

Amid political turbulence, economic turmoil, and currency fluctuations across the African continent, the hospitality sector is similarly volatile in its performance. In accordance with a range of factors, occupancy rates in Lagos and Accra are soaring, while those in Nairobi, Addis Ababa and Gaborone are plummeting annually.

The economic scenario in Africa is often viewed as a whole, especially when examining economic trends. The absence of a single gargantuan economy such as China, the United States or Germany often leads people to view the whole region as a singular entity, contributed to in unison by all the countries that comprise it.

However, perhaps no metric is a clearer indication of nuanced variations than the levels of willingness among foreigners to visit. Tourists who have absolutely no qualms about visiting South Africa or Tanzania, for instance, would take major issue with a visit to war-torn South Sudan. In many ways, the flow of tourists to a country is a comprehensive reflection of its overall well-being.

A correlation of this precise nature has emerged in the latest review of the hospitality market across the continent, conducted by real estate and leisure consultancy, HTI Consulting. The levels of occupancy and the growth of average daily rates of individual industries almost directly corresponded with the political-economic conditions.

The highest growth in the rate of occupancy, for instance, was recorded by Lagos. Situated in the richest country on the continent, Lagos placed ahead of 13 other cities that were surveyed by the firm on the list of occupancy growth rates. The Ghanaian city of Accra was next on the list, followed by Pretoria and Durban in South Africa, separated by Windhoek in Namibia.

Lagos and Accra with the highest occupancy growth rates in Africa

Meanwhile, a mountain of public debt in Kenya has weakened the economy and driven up prices, causing Nairobi to register the highest fall in occupancy on the list, at 11%. Political upheaval in Ethiopia partly caused occupancy rates in Addis Ababa to fall by 10%, while a mining-driven economic slump in Botswana played a role in driving Gaborone’s occupancy rate down by 7.1%.

The growth in average daily rates (ADR), meanwhile, reflects the currency fluctuations. The South African Rand, which acts a currency reference for South Africa as well as Namibia, performed strongly against the dollar last year. As a result, Windhoek in Namibia registered the highest ADR growth, followed by a host of South African cities, namely Cape Town, Pretoria, Sandton and Umhlanga.

Lagos, meanwhile, reflected the nearly 17% drop of the Naira last year, with a drop in ADR growth of 19%. Nairobi also registered a decline, at 8.4%, followed by Dar es Salaam, Lusaka, and Accra.

Commenting on the findings, Wayne Troughton, CEO of HTI Consulting said, “Both upward and downward trends were noticeable across the continent in 2017, with more positive conditions in West Africa as oil economies geared up in response to a recovering oil price. Political instability in several East African countries served to dampen those markets in the area, albeit on a temporary basis.”

HTI Consulting is a South African consulting firm, specialising in the hospitality and tourism industry. The firm has been active in this sector for 14 years, having consulted with 125 clients in 43 countries, and advised of investments of over $50 billion. Since its inception, the firm has completed more than 400 assignments globally.

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