Contributing Thought Leader
Executive Vice President
JLL Hotels and Hospitality, Sub-Saharan Africa
GHN HOTEL MARKET WATCH
GHN: Where do you see the best opportunities for hotel investment or development?
Xander Nijnens: Sub-Saharan Africa is a high growth region and branded full service hotels have led recent supply expansion. The economy and midscale segments have mainly been serviced by local and independent operators and we see strong potential for branded roll outs in this segment across the region.
Addis Ababa is the most promising market in East Africa today due to its long term economic prospects. Nairobi is recovering from saturation yet with sound tourism fundamentals, whilst Dar es Salaam is experiencing continued subdued trading. Kampala and Entebbe are high growth nodes to focus on whilst Kigali is seeing demand growth but needs more time to absorb recent openings.
In West Africa the stronger economic growth coming through in most markets is fuelling opportunity in Accra, Abidjan and Dakar. The jury is still out on whether Nigeria has fully bottomed out and back into demand growth and investors need to do their homework.
South Africa is by far the largest market in Southern Africa and is seeing high supply growth through local owner operators as well as branded new supply. The value oriented midmarket segment in particular is expanding, and consumers are benefiting from new product at lower rates. Demand growth needs to kick soon to avoid oversupply. Other cities in the region like Maputo, Gaborone, Lusaka and Windhoek have potential yet each market is unique.
Resorts in the Indian Ocean markets of Mauritius, Seychelles and Zanzibar have had a great run during the past four years and this will cool down whilst still offering good investment potential.
With the maturation of the Sub-Saharan Africa hotel sector opportunities are created for new segments like serviced apartments, lifestyle hotels, hostels and other more niche products. Debt capital markets are generally immature and there is the opportunity for banks with sector specialists to enter the market.