Hotel demand up in key central African cities

Hotel demand grew strongly across the three main economic centres in Western and Eastern Africa for year-to-date October 2011, compared to the previous year, according to data from STR Global, the leading provider of market information to the global hotel industry. Demand grew 27.9 percent in Lagos, Nigeria, 19.4 percent in Dar es Salaam, Tanzania, and 10.7 percent in Nairobi, Kenya.

STR Global now reports on nine hotels in each of the three cities, highlighting the growing focus of international and regional chains on sub-Saharan Africa. With limited new hotel supply expected in the near future in Dar es Salaam and 996 rooms in Nairobi’s pipeline, only Lagos is anticipating to almost double its room inventory with an additional 3,038 rooms at different stages of development.

Supply and demand percentage change, year to October 2011

Source: STR Global

In Lagos, Nigeria’s main economic hub and third largest city in Africa behind Cairo and Kinshasa, hotel market performance was led by growing occupancy (+3.2 percent) compared to the previous year benefiting from strong demand by oil-related industries and the growing non-oil business sectors. The increasing supply in the city resulted in more pressure on price competitiveness. The average daily rate (ADR) declined by 9.5 percent to US$279 for year-to-date October 2011. Despite the fall of Lagos’ ADR, it is still one of the highest across the continent.

On the Eastern coast of Africa, Dar es Salaam, the economic centre of Tanzania, increased its occupancy year-to-date October 2011 to 69.2 percent (+19.3 percent) compared to 58.0 percent the previous year. The main drivers for such performance have been led by the limited new hotel supply (+0.1 percent) and the double-digit demand growth (19 percent). As the Tanzanian Shilling depreciated against the U.S. dollar, losing 30 percent since January 2011, Dar es Salaam saw declining ADR by 1.4 percent to US$ 122.87 year-to-date October 2011, whilst in local currency ADR was up 8.5 percent. RevPAR grew by 17.6 percent to US$ 85.02 during the same period.

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Source : HotelsNewsNow.com