A PwC report forecasting growth prospects in Africa’s hospitality industry has projected that Nigerian hotels will grow very fast over the next five years. The report, which was titled, Hotels outlook: 2019–2023 Future resilience, also examined growth prospects in other leading tourism markets such as Kenya, Tanzania, South Africa, Mauritius, etc.
Focus on Nigerian hotels
According to the report, Nigeria will most likely experience a 12.0% compound annual increase. This will make the country’s hotels market the fastest growing on the African continent over the 5-year period. In the same vein, the projected growth will encourage the establishment of new hotels in the country.
“During the next five years we expect Nigeria to be the fastest-growing market with a projected 12.0% compound annual increase. A number of new hotels are scheduled to open in the next five years, which will accommodate further growth in guest nights, without putting upward pressure on ADR.”
The new hotels will be set up by the already established ones like Hilton, Best Western, Novotel, Westin, Marriott, and Mövenpick, etc. These are established players in the international hospitality market, and it is interesting that they have seen opportunities in Nigeria. But then again, Nigeria is Africa’s largest economy which has always presented immense opportunities to those willing to take them.
What this means
An influx of new players will create a competitive market environment which may have advantages and disadvantage. For instance, customers will have more options to choose from when seeking a five-star luxury hotel experience. On the other hand, increased competition may not be favourably-disposed to existing players such as Eko Hotels, Ikeja Hotel, Capital Hotel, Tourist Company of Nigeria Plc, etc.
This notwithstanding, the projected growth may still inspire investors to buy up stocks in some of the listed hotels. After all, greater growth prospects mean that investors stand greater chances of getting more returns on their investments.
It should be noted that generally, the Nigerian hospitality industry has been performing fairly well in recent times. The PwC report noted that in 2018, Nigerian hotels were among the fastest-growing in Africa, alongside the likes of Kenya and Mauritius.
To download the full report, please click here.