Sub-Saharan Africa Weighing on Travel Industry Growth

Recognizing infrastructure as a catalyst for tourism and hotel construction development, Sub-Saharan African countries embraced travel industry as part of their overall growth strategy. It’s set to spur more economic growth for the continent and directly employ 6.7 million people by 2021, says the World Bank report.

Tourism accounts for one in every 20 jobs in 2011 and is one of the few industries on the continent in which women are highly represented as employees and managers. Strong political support for developing the industry and attracting increased private investment helped the region to outpace other regions in tourism growth.

The report cites success stories from Cape Verde, Kenya, Mauritius, Namibia, Rwanda, South Africa, and Tanzania among others as countries who have simplified their tourism policies, liberalized air transport and diversified tourism in order to create a positive investment climate for tourism development.

Tourism is increasingly attracting regional and international investment. Returns on investments in the sector remains among the highest in the world. Global hotel chains are also expanding to meet increased demand from both international tourists and the continent’s own fast-growing middle class. The growing economy of the region, coupled with a current undersupply of hotel rooms, have gained the attention of investors around the world. Its untapped landscape, which features rich, natural resources and diverse landscapes unique to the region, positions the hotel market to capture both business and leisure demand.

Countries across the region have specifically cited travel and tourism as a key pillar for economic growth.  Their investment environment continue to capture the attention of the global lodging community. In recent years, the region emerged as a target market for international hotel investors and operators as lucrative location.  Out of the total 30 hotel groups and more than 60 brands in operation, 47% of the hotel rooms are in sub-Saharan Africa leading other parts of the continent. Since 2013, the pipeline developments increased by 23% with about 80 hotels in various stages of development.

The region is well-positioned for growth due to an abundance of natural resources such as land, oil and labor force. The World Bank has forecasted annual GDP growth in sub-Saharan Africa to increase to 5.5% by 2015, improving from 4.2% in 2012. Investor-friendly climate, peace and gradual improvements in policy and infrastructure encouraged international investors who are adding value to the growth. This acquisition not only doubled the number of brand hotels, it also further circumvent the market-entry obstacles resulting in a significant competitive advantage.

This has tremendously stimulated Sub Saharan countries which are heavily relying on leisure tourists thus offering guests history, pristine beach resorts and extensive nature reserves for safaris. In recent years, government efforts to promote domestic and international tourism have significantly increased, and there has been a remarkable effort to attract travelers from all over the world. Investment and sightseeing opportunities in the sub-Saharan Africa remain as diverse as they are abundant, with plentiful prospect in both business and leisure travel.

“Sub Saharan tourism is now taking a step to close the gap of infrastructural and other barriers,” says Estelle Verdier, Managing Director of Jovago East and Southern Africa. “Given the region’s abundant natural and cultural resources as well as booming business developments, the fundamentals are in place to further take advantage of tourism reaping the desired benefits” she added.

Certainly the overall regional outlook remains promising. The government’s continued effort to bolster the economy resulted in an influx of foreign investment. Thus travel has further increased due to improved and often luxurious infrastructure developments.

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