The research by U.S. firm JLL says the long-term outlook continues to be strong driven by positive economic, demographic and tourism trends, with all indicators pointing to continued hotel demand growth.
The survey came as a continental hotel investment forum opened Tuesday in Kigali.
The three-day Africa Hotel Investment Forum (AHIF) brings together top international hotel investors in Africa and local operators, government officials and industry experts to discuss all aspects of hotel investment and operation on the continent.
“From an investment perspective, we forecast 1.7 billion U.S. dollars to be invested in hotels in Sub-Saharan Africa in 2017 and a further 1.9 billion dollars in 2018. The new supply pipeline continues to grow with greater efficiency in realizing new developments as the sector matures,” Xander Nijnens, Senior Vice-President, Hotels and Hospitality Group of JLL Sub-Saharan Africa, said in a statement to the forum.
He said the medium-term outlook for the hotel sector is positive.
The survey predicted demand growth of 3 percent to 5 percent per annum in the coming three years. It added that despite the positive outlook, the hotel sector is not without challenges.
According to the survey, the main barrier to entry in Sub-Saharan Africa is finding projects that meet the minimum return threshold.
Lack of foreign currency also ranked higher this year as investors struggle to deal with various currency factors, it said.
Improvements in political, economic and currency stability will see a reduction in the risk premium placed on hotel investment in the region, which will in turn increase capital flows, it added. Enditem
Source: Xinhua/NewsGhana.com.gh
