Blog: Uganda, Ethiopia overtake Kenya as hospitality investment destinations Read more at:

Uganda, Ethiopia overtake Kenya as hospitality investment destinations Read more at:

By Macharia Kamau

Ethiopia and Uganda have overtaken Kenya as key investment destinations for global hotel chains scouting for opportunities in the region. The two nations feature on the top five list, whose hotel sectors are expected to receive huge investments in sub-Saharan Africa, alongside Nigeria, Angola and Ghana.

A new report ranking countries according to the number of jobs that new investments in the hotel sector will create this year puts Nigeria as the hottest spot for investors in the hotel industry.

Non-branded hoteliers

The survey by W Hospitality Group is based on the number of signed contracts by international and regional brands as well as smaller non-branded hoteliers.

“Nigeria leads the way in sub-Saharan Africa with the creation of 53,000 jobs.  It is followed by Ghana with 11,000 and Angola (9,000), Ethiopia (8,800) and Uganda with 8,500,” said W Hospitality Group Managing Director Trevor Ward.  “In Sub Saharan Africa, growth is forecast to be a much faster 23 per cent.” “Where there are fewer people with hospitality industry experience, HPA anticipates three major trends; an influx of top management from abroad, a war for talented middle management and substantial investment in training programmes,” he said.

“By comparison with the developed economies, where growth rates are struggling to exceed two per cent, Africa is positively booming and in an industry which is as labour intensive as hotels, that is very good news for job creation.”

Security concerns, unconducive policies and a recent imposition of value added tax on tourism and hotel services are cited by players as among the factors that are seeing the decline of the industry.  There are also external factors like the Euro zone crisis that have reduced travel from Kenya key tourist source markets.

Growth rates

The over 20 per cent growth in the region is unlike the situation in Kenya where the industry has posted slower growth rates and hotels have been laying off staff owing to low booking rates.

The company expects about 320,000 jobs to be created across Africa with North Africa creating 115,000 jobs across five countries and sub-Saharan Africa creating 165,000 across 23 countries. “The companies leading the way are Hilton Worldwide, which will have a need for 10,000 new workers, Accor for 6,000, Carlson Rezidor for 5,500 and Starwood and Marriott for 4,000 each,” said Trevor.“

Major global brands have committed to setting up in Kenya, some of whom have already started operation either through investing in own property or coming to manage hotels put up by other investors.

Among the notable brands that have set up or committed to invest in Kenya include Best Western, Radisson Blu, Park Inn, Three Cities, Kempinski and Lansmore.

This is despite Kenya’s  five-year blue print for the industry planning to up number of visitors to three million per year, and earnings to Sh200 billion by 2017. This is compared to Sh96 billion that tourism earned Kenya in the 2012/2013 financial year.

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