New report: Huge growth potential for Africa’s hotel and hospitality sector in 2023
Travel and tourism are firmly on the agenda in Africa, according to a new report on the hotel and hospitality sector, which shows a faster post-pandemic recovery than anticipated, strong resilience and immense growth potential.
The 2023 Hotel and Hospitality Industry Confidence Index is a collaborative research report between Moore Global (Moore) and dmg events aimed at understanding the trends, challenges and perceptions facing the industry. In putting the report together, participants from 17 African countries in the hotel and hospitality market were surveyed and overall, feel optimistic about the prospects of the sector.
“The survey paints a picture of a sector that’s largely positive in its outlook, and that’s looking to find fresh routes to traveller engagement and new ways of building traveller experiences,” says Evan Schiff, Portfolio Director at dmg events.
Even with the challenges facing the sector, almost 82% of respondents were positive about the next six months, while 90% felt positive about the sector over the next 1-2 years.
Among the findings, respondents pointed to the potential for increased investment to bolster growth in the industry and leverage it effectively. Statista predicts US$13.80 billion in hotel market revenue volume on the continent by 2027. This means an anticipated rise in rate of revenue on an annual average of 8.68% between 2023 and 2027.
An uptick in activity last year saw Africa achieve the world average in the pace of recovery, with North Africa leading the way on the continent at -29% growth in international tourism. This is a big increase over the -73% during the pandemic globally. Sub-Saharan Africa lagged 43% behind its pre-pandemic key performance indicators but the recovery is in motion across Africa and the opportunities for hotel and hospitality operators are vast.
The key trends and challenges from the last year are a good indication of what to expect this year.
Trends that were most prevalent in travel and tourism in 2022 included Environmental, Social and Governance (ESG) considerations, with travellers seeking sustainable tourism, conscious of the energy costs of a vacation. Nature-bound getaways or ‘staycations’ were popular to connect people with the environment. Medical tourism saw post-pandemic risk factors shaping how some chose to travel, including in the pursuit of wellness. The GOAT and growth trend was another key factor as identified in research from Expedia, highlighting that 2022 was the year of the GOAT (Greatest of All Trips) for travellers as they embraced ‘carpe diem’ and embarked on ‘bucket-list’ travel and new experiences.
Automation and intelligent technology will further shape the industry to deliver on cost cutting while providing exceptional service. Due to Covid, some trends in hospitality are here to stay. “Check-ins went digital, restaurant menus were accessed via QR code, and customers are happy, which is encouraging hoteliers to go even further,” says Schiff. “Many apps that were once a ‘nice to have’, are now fully interactive and engaging pathways to customer engagement and interaction. This is one of the most exciting trends in the industry.”
“Securing appropriately skilled staff in hospitality has proven to be a big challenge, adds Global Sector Leader: Hotel and Leisure at Moore Global, Márton Takács. “This along with the rising costs of energy and reliable supply, construction costs and the impacts of inflationary pressures, which extend to tightening the discretionary income purse strings for travellers, have weighed heavily on the industry.”
Covid still presents a dynamic, ongoing risk to the sector and occupancy rates are still generally lower than pre-pandemic, but Takács adds that there is a determination to not only preserve employment, but to keep going and to innovate. A substantial 94.3%% of respondents made their commitment clear to supporting employees and to retaining talent within the sector.
The Hotel & Hospitality Show, hosted by dmg events, is in its sixth year and seeks to connect brands with hospitality buyers in Africa, promoting B2B matchmaking services and masterclasses as part of its agenda, encouraging networking and the forming of meaningful cross-border collaborations.
Last year, 67 countries from around the globe were represented at the three African Trade Week events, opening doors for local sellers to meet international buyers. The African hotel and hospitality sector is ripe for disruption and is ready for another exciting year.
For more information on the Hotel & Hospitality Show, visit www.thehotelshowafrica.com.
To read the full 2023 Hotel and Hospitality Industry Confidence Index, click here.
About dmg events – South Africa
dmg events is a leading organiser of face-to-face events and a publisher of trade magazines.
We aim to positively impact the African economy and community by providing platforms for public and private sector professionals to connect and forge strong relationships that will drive the future of the African continent.
dmg events has a portfolio of 80 events managed across 11 offices worldwide with two of those offices based in South Africa. The team organises 14 events in Africa, bringing together more than 30,000 professionals from the Construction, Infrastructure, Coatings, Mining, Transport, Food & Beverage, Trade and Hospitality sectors.