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Egypt dominates African hotel investment market

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The Cecil in Alexandria, one of Egypt's finest hotels

Egypt is very much the dominant player in Africa’s hotel sector, as the Arab world’s largest country looks to rejuvenate its tourism sector following the impact of the coronavirus pandemic.

A total of 80,300 rooms in 447 hotels, across 42 African countries, are currently in the pipeline for development, according to a study by hospitality advisory firm W Hospitality Group and the Africa Hospitality Investment Forum.

The figures also show that of these 21,281 rooms in 85 hotels are planned in Egypt, with around a third of these currently under construction. Second in the rankings was Morocco with 7,209 rooms in 50 hotels. However, Morocco had a higher delivery rate as 77.4 percent, or 5,577 rooms, were out of the ground and off the drawing board.

The other African countries making up the top five were Ethiopia (5,206 rooms in 29 hotels), Cape Verde (4,639 rooms in 17 hotels) and Nigeria (5,619 rooms in 33 hotels).

When it comes to hotel brands, the dominant player across the African continent was French hotel group Accor, which manages brands such as Raffles, Fairmont, Sofitel, Novotel and ibis, which is developing 20,857 rooms across 107 hotels.

The second biggest player is American hotelier Marriott, who manages brands such as Ritz-Carlton, St. Regis, Sheraton, Le Méridien and Westin, and has a pipeline of 20,248 rooms in 103 hotels across the African continent.

Trevor Ward, managing director, W Hospitality Group warned that the numbers may be too optimistic, pointing to the fact that less than 30 percent of hotels announced in 2020 and 2021 actually opened.

He also added that he was surprised that “the majority of investment is going into upscale, upper upscale and luxury hotels, when there is very strong demand across Africa for decent quality branded budget and midscale hotels”.

The news of Egypt’s development plans comes as its tourism sector was devastated by the COVID-19 pandemic, with revenue dropping to $4.9 billion in 2020/21, down from $9.9 billion a year earlier. 

Reuters reported that revenue had recovered to $5.8 billion in July-December 2021, but this year the Ukraine war was likely to have an impact as Russian and Ukrainian tourists were some of its biggest source markets.

Egypt’s tourism board is looking to the markets such as Western Europe, including Britain, Germany, Spain, France and Italy, as well as Hungary and Gulf Arab countries, to help fill its existing pool of hotel rooms.

The Ministry of Tourism and Antiquities, represented by the Egyptian General Authority for Tourism Activation, brought 33 exhibitors from major Egyptian tourism companies and hotel chains to the Arabian Travel Market exhibition in Dubai last month.

At the same time, the ministry also launched the ‘Your Vacation in Egypt’ marketing campaign, targeting Arab travellers in Saudi Arabia, the UAE, Kuwait, and Jordan.

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