A new report on the hotel and hospitality sector has revealed that African travel and tourism has potential for immense growth after showing a faster post-pandemic recovery than anticipated.
The 2023 Hotel and Hospitality Industry Confidence Index – a collaborative research report between market analyst, Moore, and dmg events – surveyed participants from 17 African countries in the hotel and hospitality sector. It highlighted that 82% of respondents were positive about the next six months, while 90% felt positive about the sector over the next two years.
“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,” said Evan Schiff, Portfolio Director of dmg events.
The report highlighted further that 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 are vast.
“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,” added Global Sector Leader: Hotel and Leisure at Moore Global, Márton Takács.
Highs and lows
According to CEO of BON Hotels, Guy Stehlik, domestic tourism in Southern and South Africa looks set to stabilise in 2023 to pre-2019 levels after pent-up demand helped the sector recover and grow, and gave rise to trends such as backyard travelling, ‘workcations’ and longer stays.
He said the increasing cost of living would see affordable accommodation and destinations in small towns becoming more sought-after for local travel, while hotel occupancy and room rates were expected to continue increasing.
Stehlik noted: “Our favourable exchange rate remains a drawcard and forward bookings from the international market have increased significantly. South Africa remains a top destination in Africa for luxury travel and in fact, what we are seeing, is an increased demand for luxury accommodation and for private experience-based trips.”
But, he cautioned, the outlook for international economic activity is nevertheless worrying with a worldwide recession looming. “Indications are that the USA will be leading this recession, closely followed by China. This will impact international travel, and into the South African market as well.”
Energy challenges
Sun International’s Chief Operations Officer: Hospitality, Graham Wood, agrees that the sector is largely on positive path of recovery. “Our recovery has been positive and ahead of expectations from a year ago,” Wood told Tourism Update.
He highlighted, however, that the energy challenges of the country remained an issue.
“Domestic leisure travel is on the up and conferencing demand is continuing off the back of the growth experienced in the last six months of 2022. Obviously, lack of economic growth and the energy challenges are key concerns for our industry and these additional costs are impacting margins. We have got used to comparing results to 2019 but inflationary pressures are affecting margins.”
Wood further advised that industry needed to be aware of post-pandemic trends. “I think travellers have got used to flexibility during and post-COVID and we, as an industry, have to be alive to this. The open spaces and outdoors are what travellers are craving now more than ever before.”
‘Once-in-a-lifetime experiences’
Phenyo Marumo, Minor Hotels Regional Marketing Communications Manager, said: “We are feeling rather optimistic going into 2023. We have not only seen an increase in Quarter 1 2023 vs Quarter 1 2022 at most of our properties overall, we have also seen an increase in both leisure and business enquiries.”
According to him, there has been a huge demand from inbound travellers for Southern Africa, and even more so now that people are looking for once-in-a-lifetime experiences.
“In the era of digital nomads or bleisure travel, travellers are keen on combining business travel with leisure, which is a positive for hotels as bleisure mean longer stays.”