Market Insights Mobility Travel & Tourism

Hotels - Africa

Africa

The Hotels market in Africa is expected to witness remarkable growth in the coming years.
According to market projections, the revenue in this market is expected to surge from US$12.10bn in 2024 to US$14.83bn by 2028, at an annual growth rate of 5.22%.
It is anticipated that the number of users in this market will increase to 119.50m users by 2028, with a user penetration of 7.5% in 2024, which is expected to reach 8.4% by 2028.
The average revenue per user (ARPU) is forecasted to be US$123.90.
It is projected that by 2028, online sales will generate 81% of the total revenue in the Hotels market.
Interestingly, United States is expected to generate the highest revenue of US$110,500m in 2024, making it the major player in the global Hotels market.
The hotel market in Egypt is rebounding with new developments and renovations, attracting both domestic and international tourists.

Key regions: Singapore, Indonesia, India, United States, Europe

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Analyst Opinion

The Hotels market in Africa is experiencing significant growth and development, driven by various factors shaping the industry across the continent.

Customer preferences: Customers in Africa are increasingly looking for unique and authentic experiences when choosing hotels. This has led to a rise in demand for boutique hotels and eco-friendly accommodations that offer a more personalized and sustainable stay. Additionally, there is a growing interest in luxury hotels and resorts, especially among affluent travelers seeking high-end amenities and services.

Trends in the market: In countries like Kenya and Tanzania, safari lodges and luxury tented camps are becoming increasingly popular, catering to the demand for experiential travel and wildlife tourism. These unique accommodations offer guests the opportunity to immerse themselves in nature while enjoying high levels of comfort and service. Moreover, urban centers such as Lagos and Johannesburg are witnessing a surge in business hotels to accommodate the growing number of corporate travelers visiting these economic hubs.

Local special circumstances: In North African countries like Morocco and Egypt, the hospitality sector is benefiting from a steady influx of international tourists attracted to the rich history, culture, and stunning landscapes of these destinations. As a result, there is a growing need for a diverse range of accommodation options, from luxury resorts in coastal areas to traditional riads in bustling medinas. Additionally, in countries like South Africa and Mauritius, the rise of Airbnb and other vacation rental platforms is reshaping the accommodation landscape, offering travelers a wider selection of lodging choices beyond traditional hotels.

Underlying macroeconomic factors: The Hotels market in Africa is also influenced by macroeconomic factors such as infrastructure development, political stability, and foreign investment. Countries investing in improving their transportation networks, such as airports and roads, are likely to attract more tourists and hotel developers. Moreover, political stability and security concerns play a crucial role in shaping tourist perceptions and destination choices. Additionally, foreign investment in the hospitality sector, particularly from international hotel chains and investors, is driving the expansion and modernization of the industry across the continent.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on bookings, revenues, and sales channels of hotels.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on a specific rationale for each market. As a basis for evaluating markets, we use financial reports, the Global Consumer Survey, third-party studies and reports, data from industry associations (e.g., UNWTO), and price data of major players in respective markets. To estimate the number of users and bookings, we furthermore use data from the Statista Consumer Insigths Global survey. In addition, we use relevant key market indicators and data from country-specific associations, such as country-related GDP, demographic data (e.g., population), tourism spending, consumer spending, internet penetration, and device penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, ARIMA, which allows time series forecasts, accounting for stationarity of data and enabling short-term estimates. Additionally, simple linear regression, Holt-Winters forecast, and exponential trend smoothing methods are applied. A k-means cluster analysis allows for the estimation of similar countries. The main drivers are tourism GDP per capita and respective price indices.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change.