HOT TOPIC expensive, PwC expects little growth in occupancy.
Overall, PwC says the outlook for Africa’ s hotel industry is vibrant and has the potential to create many jobs and boost African economies. What could dent that is the disruptive growth of Airbnb, the private home and bedroom booking service. Airbnb is still in its infancy in Africa, but it’ s making a serious bid to put more countries on its map. So far the challenge it poses to hotels is very muted, but its impact will become more noticeable as its popularity grows.
Of its 1.5 million global listings only 50 000 are in Africa and the Middle East. Most of those are in South Africa, with half of the country’ s 20 000 listings based in Cape Town.
About 7 500 of its South African hosts were active in 2015, up 190 % from 2014. The number of guests they welcomed hit 134 000, up 250 % from 2014, and they stayed an average of 4.9 nights.
Those active hosts earned an average of R28 800, but Airbnb’ s Managing Director for Africa and Middle East, Nicola d’ Elia, disputes that this is money diverted from the hotel sector.“ Our Economic Impact Studies show that people who travel on Airbnb stay longer wherever they go and sometimes wouldn’ t even have taken that trip,” he says.“ Airbnb makes the travel pie bigger – which is good news for everyone. And the numbers suggest that hotel occupancy over recent years has also developed really positively – so I’ d say it’ s a complementary offer and all of the hospitality industry benefits from more people travelling.”
Actually, its statistics show that only 27 % of its guests would not have travelled or would not have stayed as long without Airbnb. Which means 73 % presumably would have stayed in a hotel if Airbnb hadn’ t lured them away.
Tourism: A case study in Cape Town
50 %
Guests who spent the money they saved by staying on Airbnb on food, shopping, etc.
43 %
The service is also poised to become a threat in other countries. It has properties all over Mauritius, many in Kenya( clustered in Nairobi) and along the coast around Mombasa. Nigeria also has a fair scattering in its main cities.
Hotels in Mauritius have had a tough time in recent years against competition from other Indian Ocean islands. But the country experienced a welcome 11 % increase in visitors in 2015, the largest in five years. But a drop in average hotel room rate capped that to a 6.7 % increase in room revenue. More than half its visitors come from Europe and 25 % come from Africa, with South Africans accounting for 9.5 %. Last year, Mauritius enjoyed a surge of 41.4 % more Chinese visitors, partly because South Africa’ s visa restrictions saw them divert to Mauritius instead.
Nigeria’ s long-term prospects for the hospitality sector remain positive, although Ebola, terrorism and a decrease in oil and gas prices are hitting the industry. The number of
guest spending thAt stAys in the loCAl neighbourhood( where guest stAyed) guest stays in Cape town
guest spending in Cape town
stay nights has dropped by 12 % and room revenue has fallen by 3.6 % over the past two years.
Various companies are planning to build 27 new hotels in the next five years, so occupancy rates will probably dip to 37.3 % due to oversupply. However, room revenue should still grow from $ 321 million in 2015 to $ 507 million in 2020 due to increases in stay unit nights and average room rates.
Kenya is another country where terrorism is hitting tourism and some hotels have had to close as visitors dried up completely, according to Calicchio. Terrorism and political instability are expected to hit the figures again in 2016 and 2017.
Yet Kenya’ s hotels managed to grow their revenue for the first time in four years in 2015 by increasing their room rates, despite stay nights falling by 2.8 %. PwC expects 16 new hotels to be built in the next five years, which will benefit from a growth in domestic tourism as Kenya’ s middle-class is steadily on the rise.
Travel Update | issue 9
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