Tourism: Africa Should Invest More in Mid-Market Hotels as Travel Sector Presents New Business Opportunities, Experts Say
Africa should invest more in mid-market hotels as its growing travel industry begins to present new business opportunities, experts have said.
Mid-market branded hotels refer to three-and four-star hotels that are positioned between five-star and entry-level budget hotels.
According to a report by leading research group, Euromonitor International, Africa’s tourism and travel sector is on the rise. However, some segments within the industry are still under-explored.
The report, titled ‘Megatrends Shaping the Future of Travel’, indicates that mid-market hotels and related brands have a chance to cash in on what is essentially a multi-billion dollar sub-sector.
In a recent exchange, Senior VP for Development in Sub-Saharan Africa for the Radisson Hotel, Andrew McLachlan told Euromonitor International that Africa is now ready for mid-market hotels as infrastructure to support hotel operations has improved and the market has matured and is ready for segmentation.
McLachlan suggests that South Africa in particular is ready for trendy economy brands such as Radisson’s Prizeotel, which he believes will be introduced in the country in the near future.
Early in 2018, Radisson Hotel Group announced plans to grow its portfolio in sub-Saharan Africa to 120 hotels by 2023, an increase of 60% on current stock.
“While its past focus has been on its upper-upscale Radisson Blu brand, moving forward 65% of the new hotels will be upscale and mid-market hotels,” said Euromonitor International.
The company has already introduced the upscale Radisson brand in Africa, with the first opened in Dakar, Senegal, in January 2018.
These developments come at a time when the rise of experiential travel has favoured growth of companies such as Airbnb in Africa.
Euromonitor International states that strong travel demand, lacking hotel stock and a general absence of regulation benefit short-term platforms. Airbnb aims to invest $1 million in Africa by 2020 to promote community-led tourism projects. According to the company, Africa is seeing some of the strongest growth in bookings.
Egypt, which is entering a period of renewed stability, saw growth in guest bookings of 134% between 2017and 2018, with further strong growth in Kenya, which posted a growth of 60%, and South Africa also posting 60%, Tanzania 53% and Morocco 50%.
“Increasingly, Africa is not just seen as a destination, but also as a plethora of source markets,” explained Euromonitor International’s Wouter Geerts.
“Local companies such as Travelstart and Hotels.ng, as well as Tajawal.com in the Middle East, are able to benefit from this growth by offering services in local languages, having greater understanding of local consumer preferences and behaviour,” Geerts, who holds a PhD on sustainability in the hospitality industry from Royal Holloway, University of London, continued.
Euromonitor’s researchers also note that The Middle East and Africa region, and United Arab Emirates in particular, has been at the centre of innovation in an effort to make the travel journey completely frictionless.
Biometrics and facial recognition are becoming increasingly common in airports, arguably one of the travel spaces with the most friction. Dubai Airport, for example, has installed a face-scanning Virtual Aquarium, a tunnel equipped with over 80 facial recognition and retina cameras, replacing traditional border gates.
And new research shows that while the middle class is in retreat in many developed countries, struggling to maintain the economic position they enjoyed for the last half a century, the middle class is booming in developing regions such as Asia and Africa.
“This translates into a greater desire to travel for leisure purposes, and the stronger economy boosts business travel,” said Geerts.
By DENNIS LUKHOBA