In PwC’s African hotel forecast for 2021, its team of hotel specialists discuss the outlook for Tanzania. Tourism Update shares the outcome of these findings.
PwC reports that inadequate infrastructure remains an issue for the tourist market in Tanzania. “Poor roads, particularly to national parks, and power outages and power shortages have an adverse effect on the tourist experience. Improvements in basic infrastructure should help tourism in the long run.”
On the other hand, Air Tanzania is upgrading its infrastructure, increasing its capacity and adding more routes. The government is also upgrading regional airports to make them more accessible. “Tanzania has a vibrant economy with real GDP growing at rates of 7.0% or higher over the past four years.”
Real GDP
PwC projects that real GDP will average a growth of 6.8% compounded annually through 2021. “Even with this moderation, Tanzania will still have one of the fastest growing economies in the world. At the same time, consumer price inflation is moderating in Tanzania.”
While global GDP is growing at a much slower rate than Tanzanian GDP, it is improving. Global GDP growth is projected to rise to 3.0% in 2020-21 and to average 2.9% compounded annually over the entire forecast period. “A stronger global economy will have a positive impact on Tanzania’s foreign tourism.”
Room revenue
Growth in available rooms will average 2.0% compounded annually with a 14% cumulative increase over the forecast period. Available rooms are forecast to sit at 8 500 in 2021.
“We expect ADR growth to be more moderate, in part to counteract the impact of the new VAT legislation, and project a 4.4% compound annual increase over the next five years. We look for guest nights to increase again in 2018 and to rise at a 2.4% compound annual rate through 2021, leading to a projected 6.9% compound annual increase in room revenue.
“We project guest nights to rise from 1.6 million in 2016 to 1.8 million in 2021, a 2.4% compound annual increase. Guest nights will rise a bit faster than available rooms and hotel occupancy will edge up to 58.0% in 2021 from 56.8% in 2016. We project the ADR to increase to $174 in 2021, a 4.4% compound annual increase.”
Total room revenue will expand by 6.9% compounded annually, rising to $371 million in 2021 from $224 million in 2016.
