Tourism Report: the Business Hotel Industry in Select East and West African Countries May 2012 Department of Research and Information Contents

Tourism Report: The business hotel industry in select East and West African countries May 2012 Department of Research and Information Contents

Contents

Highlights 2 Introduction 4 HighlightsBusiness h otel industry in select East and West African countries 62 Introduction- Burundi 64 Business- C hôotelte d’Ivoire industry in select East and West African countries 76 - EthiopiaBurundi 86 - GhanaCôte d’Ivoire 97 - KenyaEthiopia 118 - MalawiGhana 139 - MozambiqueKenya 1511 - NigeriaMalawi 1713 - RwandaMozambique 2015 - TanzaniaNigeria 2317 - TogoRwanda 2520 - UgandaTanzania 2723 Challenges- Togo generally facing the tourism industry in East and West Africa 2259 Economic- Uganda outlook 3027 InformationChallenges generallysources facing the tourism industry in East and West Africa 3129 Economic outlook 30

Information sources 31

Highlights

. Africa’s unparalled natural resource endowment and consumer market of around one billion people provide a wide range of investment and trading opportunities that are being increasingly explored by the private sector, both foreign and local. However, most countries in Africa continue lacking the required infrastructure and services, including sufficient hotel accommodation . Africa’sof adequate unparalled quality to natural support resource growing levelsendowment of business and activitconsumery and markethelp unlock of around their full one economic billion potential.people provide a wide range of investment and trading opportunities that are being increasingly explored by the private sector, both foreign and local. . However,Burundi has most more countries than inone Africa hundred continue hotels lacking with the a requiredcombined infrastructure total of around and services, 1 500 rooms. including More sufficient than hotelhalf of accommodation the hotels are ofconcentrated adequate quality in Bujumbura, to support withgrowing others levels scattered of business around activit they andcountry. help unlockA gap theirin the full busieconomicness hotelpotential. industry might exist in the refurbishment and upgrading of existing facilities. . Burundi has more than one hundred hotels with a combined total of around 1 500 rooms. More than half of the hotels are . concentratedThe business in environment Bujumbura, within Côte others d'Ivoire scattered is starting around to the recover, country. possibly A gap leadingin the busi to nessa gradual hotel returnindustry of mightfixed investmentexist in the refurbishmentactivity. Abidjan and and upgrading Yamoussoukro of existing have facilities. a number of international standard hotels, but some may need to be refurbished and/or rebranded. . The business environment in Côte d'Ivoire is starting to recover, possibly leading to a gradual return of fixed investment . Ethiopia has a relatively small number of hotels and the industry has recorded very high occupancy rates. This indicates a activity. Abidjan and Yamoussoukro have a number of international standard hotels, but some may need to be refurbished and/or need to augment the supply of quality hotel accommodation in a number of cities so as to improve the tourism sector’s rebranded. competitiveness. Addis Ababa, the capital city as well as a major political centre for Africa as a whole, has high room occupancy . rates,Ethiopia particularly has a relatively at the top small-end of number the ma rket,of hotels where and quality the hotel industry accommodation has recorded is in very short high supply occupancy. rates. This indicates a need to augment the supply of quality hotel accommodation in a number of cities so as to improve the tourism sector’s . competitiveness.Ghana’s economy Addis was Ababa, the second the capital-fastest city growing as well in a sthe a majorworld politicalin 2011. centre Accra for is Africadeemed as to a havewhole, a sufficienthas high numberroom occupancy of hotels, rates,although particularly these are at theoften top in-end need of theof refurbishmentmarket, where and/orquality rebranding.hotel accommodation Kumasi and is in Takoradi short supply are . constrained by a lack of quality accommodation to the extent that residents are, apparently, renting their houses to business travellers. Both cities present . Ghanaopportunities’s economy for the wasestablishment the second of -newfastest hotels. growing in the world in 2011. Accra is deemed to have a sufficient number of hotels, although these are often in need of refurbishment and/or rebranding. Kumasi and Takoradi are constrained by a lack of quality . accommodationKenya is regarded to theas theextent most that advanced residents economyare, apparently in East, renting Africa theirand anhouses important to business transportation, travellers. communication Both cities present and financialopportunities hub for within the establishment the region. ofNairobi new hotels. is deemed to have a sufficient number of hotels, although these are often in need of refurbishment and/or rebranding considering their age. Kisumu, as an up-and-coming city, might present an opportunity for the . Kenyaestablishment is regarded of an upmarket, as the most yet affordable advanced hotel. economy in East Africa and an important transportation, communication and financial hub within the region. Nairobi is deemed to have a sufficient number of hotels, although these are often in need of . refurbishmentMalawi has few and/or hotels rebranding of an international considering calibretheir age. due Kisumu, to inadequate as an up investment-and-coming in city,the hospitalitymight present sector. an opportunit Demand yfor for su thech accommodationestablishment of isan high, upmarket, especially yet affordable along the hotel.shores of Lake Malawi, but also in major urban centres. Blantyre and Lilongwe have a number of international standard hotels, but some may need to be refurbished and/or rebranded. Mzuzu is experiencing a great deal . ofMalawi business has activity, few hotels yet it ofis lackingan international in quality accommodation, calibre due to asinadequate reflected byinvestment high hotel charges.in the hospitality sector. Demand for such accommodation is high, especially along the shores of Lake Malawi, but also in major urban centres. Blantyre and Lilongwe have a . numberMozambique’s of international tourism standard sector hashotels, experienced but some may tremendous need to be expansion refurbished since and/or the rebranded. return of Mzuzu peace is and experiencing stability. aMaputo great dealhas ofmany business hotels, activity, but some yet itof is these lacking are in in quality need accommodation,of refurbishment. as Accommodation reflected by high facilities hotel charges. in other major cities may require expansion and upgrading in order to meet growing demand and international standards. Tete is a good example, as it is a booming town with a . shortageMozambique’s of hotels tourism deemed sector suitable has for experienced business travellers tremendous wishing expansion to partake insince benefits the associatedreturn of peacewith its andhuge stability. coal resources. Maputo has many hotels, but some of these are in need of refurbishment. Accommodation facilities in other major cities may require expansion . andNigeria, upgrading Africa's in ordermost topopulous meet growing country, demand is also and the international economic standards.powerhouse Tete of is West a good Africa. example, Lagos as and it is Abuja a booming have atown number with ofa shortageinternational of hotels standard deemed hotels suitable, while forothers business are under travellers construction. wishing toHowever, partake indemand benefits for associated affordable, with yet itsquality huge hotel coal resources.accommodation is still growing rapidly. Ikeja, as an up-and-coming city, might present opportunities for the establishment of an upmarket, yet . Nigeria,affordable Africa's hotel. most populous country, is also the economic powerhouse of West Africa. Lagos and Abuja have a number of international standard hotels, while others are under construction. However, demand for affordable, yet quality hotel accommodation . Rwandais still growing’s hotel rapidly. industry Ikeja grew, as steadily an up- andfrom-coming about 600city, roomsmight inpresent 2003 toopportunities 4 825 rooms for by the 2010. establishment The capital ofcity an of upmarket,Kigali may yetbe currentlyaffordable over hotel.-supplied with hotels, but demand for upper- and mid-range hotel accommodation is likely to increase once the convention centre presently under construction is fully operational. . Rwanda’s hotel industry grew steadily from about 600 rooms in 2003 to 4 825 rooms by 2010. The capital city of Kigali may be . currentlyTanzania overwelcomed-supplied 749 with 000 hotels, foreign but demandvisitors forin 2010upper -and and expected mid-range close hotel toaccommodation 1 million in 2011,is likely with to increasebusiness once people the conventionrepresenting ce ntrearound presently 4% ofunder the constructiontotal. Dar es is fullySalaam operational. and Arusha are deemed to have a sufficient number of accommodation facilities. However, several establishments do not meet international standards and, as such, may require refurbishment and/or . expansion.Tanzania welcomedThe up-and 749-coming 000 foreignsouthern visitors city of inMtwara, 2010 andin turn, expected presents close opportunities to 1 million for thein 2011,establishment with business of new peoplehotels, representingparticularly good around value f4%or money of the 3 -total or 4.- starDar hoteles Salaam accommodation. and Arusha are deemed to have a sufficient number of accommodation facilities. However, several establishments do not meet international standards and, as such, may require refurbishment and/or expansion. The up-and-coming southern city of Mtwara, in turn, presents opportunities for the establishment of new hotels, particularly good value for money 3- or 4-star hotel accommodation. 2

Highlights

HighlightsHighlights

. Togo has a small number of hotels, some of which are not graded, yet possibly conforming to international standards. The more upmarket hotels are concentrated in the capital city of Lomé, while others are scattered throughout the country. Although extremely low room occupancy rates historically may warrant concern, a gap might exist in the refurbishment, upgrade and/or .. rebrandingTogoTogo has has a ofa small existingsmall numb numb facilities,erer of of hotels, ashotels, well some assome in theof of which establishmentwhich are are not not ofgraded gradednew hotels., ,yet yet possibly possiblyThe cities conform conform of Karaing ingand to to Sokode,international international for instance, standards standards are. . TheexperiencingThe more more upmarket upmarket a great hotelsdeal hotels of are businessare concentrat concentrat activity,eded in thusin the the possibly capital capital city presentingcity of of Lom Lom é,opportunitiesé, while while others others for are arenew scattered scattered hotel developments throughout throughout the. the country. country. Although Although extremelyextremely lowlow roomroom occupancy occupancy rates rates historically historically may may warrant warrant concern concern, ,a agap gap might might exist exist in in the the refurbishment, refurbishment, upgrade upgrade and/or and/or . In Uganda, business travellers stay twice as long and spend three times as much as regular tourists. The country is presently rebrandingrebranding of of existing existing facilities, facilities, as as we well llas as in in the the establishment establishment of of new new hotels. hotels. The The cities cities of of Kara Kara and and Sokode, Sokode, for for instance, instance, are are constrained by a lack of adequate facilities both in terms of accommodation as well as with respect to conferencing and exhibition experiencingexperiencing a a great great deal deal of of business business activity, activity, thus thus possibly possibly presenting presenting opportunities opportunities for for new new hotel hotel developments developments. . facilities. It thus presents opportunities in the mid-range category of hotel accommodation in a number of cities, as well as at the high- .. endInIn Uganda, Uganda, category business businessin the capital travellers travellers city of stayKampala. stay twice twice as as long long and and spend spend three three times times as as much much as as regular regular tourists. tourists. The The country country is is presently presently constrainedconstrained by by a a lack lack of of adequate adequate facilities facilities both both in in terms terms of of accommodation accommodation as as well well as as with with respect respect to to conferencing conferencing and and exhib exhibitionition . facilities.Havingfacilities. highlighted It It thus thus presents presents the potentialopportunities opportunities development in in th thee mid mid- rangeopportunities-range category category ofof of thehotel hotel business accommodation accommodation hotel industry in in a anumber number in Africa, of of cities, cities, it must as as well wellbe asstressed as at at the the high thathigh- - endtheend sectorcategory category faces in in the the several capital capital citymajor city of of Kampala. challenges.Kampala. These include high investment and operating costs, shortages of skilled employees, often poor service levels, generally excessive room rates towards the top end, increasing competition in certain areas, inadequate .. HavingphysicalHaving highlighted supporthighlighted infrastructure, the the potential potential largely development development high air transportation opportunities opportunities costs of of the theand business business related hotelchallenges, hotel industry industry negative in in Africa, Africa, foreign it itmust mustperceptions be be stressed stressed over that thethat thebusiness,the sector sector operating faces faces several severaland travel major major environment challenges. challenges. in certain These These countries include include high, highcosts investment investment associated and andwith operati operaticorruption,ngng costs, costs, and shortagelimited shortage invests sof of mentskilled skilled activity employees, employees,. oftenoften poor poor service service levels, levels, generally generally excessive excessive room room rates rates towards towards the the top top end end, ,increasing increasing competition competition in in certain certain areas areas, inade, inadequatequate . Nevertheless, East and West Africa are poised for continued rapid growth as they increasingly attract foreign as well as physicalphysical support support infrastructure, infrastructure, largely largely high high air air transportation transportation costs costs and and related related challenges, challenges, negative negative foreign foreign perceptions perceptions over over the the domestic investor interest and trading activity. Their resource wealth will remain a powerful magnet, while the growing purchasing business,business, operating operating and and travel travel environment environment in in certain certain countries countries, costs, costs associated associated with with corruption, corruption, and and limited limited invest investmentment activity activity. . power of Africa’s massive and relatively young population will increasingly draw the attention of the global business community. .. Nevertheless,Nevertheless, East East and and West West Africa Africa are are poised poised for for continued continued rapid rapid growth growth as as they they increasingly increasingly attract attract foreign foreign a sa swell well as as

domesticdomestic invest investoror interest interest and and trading trading activity. activity. The Their irresource resource wealth wealth will will remain remain a apowerful powerful magnet, magnet, while while the the growing growing purchasing purchasing Summarypowerpower of ofof Africa’s Africa’s business massive massive hotel and and relatively industryrelatively young young development population population will will opportunities increasingly increasingly draw draw in the the attention attention selected of of the the countries global global business business community. community.

SummarySummary of of business business hotel hotel industry industry development development opportunities opportunities in in the the selected selected countries countries

NIGERIA ETHIOPIA UGANDA • Lagos & Abuja: • Addis Ababa: Refurbishment, expansion and/or • Kampala: Establishment of world-class hotels Establishment of rebranding of existing hotels. and other accommodation; establishment of an middle-class and • Arba Minch, Axum & Lalibella: Establishment of new exhibition & convention centre; refurbishment, upper-class hotels hotels and other accommodation. expansion and/or rebranding of existing hotels. and accommodation; • Jinja & Entebbe: Refurbishment, expansion and/ refurbishment, or rebranding of existing hotels. expansion and/or • Tororo: Establishment of world-class hotels and rebranding of existing other accommodation. hotels; establishment of a convention centre. • Ikeja: Establishment of new hotels and other KENYA accommodation. • Nairobi: Refurbishment, expansion and/or rebranding of existing hotels. GHANA • Kisumu: Establishment of new • Accra: Establishment of upper- hotels and other accommodation. market hotels and accommodation; refurbishment and/or rebranding of existing hotels, refurbishment of TANZANIA the existing conference centre. • Dar es Salaam & Arusha: • Kumasi & Takoradi: Refurbishment, expansion and/or Establishment of new hotels and rebranding of existing hotels. other accommodation. • Mtwara: Establishment of new hotels and other accommodation.

CÔTE D'IVOIRE • Abidjan: Refurbishment, expansion and/or rebranding of MALAWI existing hotels. • Blantyre & Lilongwe: Establishment • Yamoussoukro: Refurbishment, of world-class hotels; refurbishment, expansion and/or rebranding of expansion and/or rebranding of existing hotels; establishment existing hotels. of new hotels and other • Mzuzu: Establishment of new hotels accommodation. and other accommodation.

BURUNDI RWANDA TOGO MOZAMBIQUE • Bujumbura: Establishment of • Kigali: Establishment of middle- • Establishment of • Maputo: Refurbishment, world-class hotels and other & upper-class hotels and other new hotels and other expansion and/or accommodation; refurbishment, accommodation; refurbishment, accommodation; rebranding of existing expansion and/or rebranding of expansion and/or rebranding of refurbishment, expansion hotels. 3 existing hotels; establishment of a existing facilities; establishment of a and/or rebranding of • Tete: Establishment of new convention centre. convention centre. existing hotels. new hotels.

3 3

Introduction

Introduction Africa has a rich endowment of natural and cultural resources, providing a vast range of investment and trading opportunities, as well as exciting and unique travel experiences that are mostly anchored in authentic cultural traits and nature itself. However, many countries on the continent continue lacking the necessary support infrastructure and services to unlock their tourism potential. Africa has a rich endowment of natural and cultural resources, providing a vast range of investment and trading opportunities, as well as excitingKey tourist and destinations unique travel such experiences as South Africa,that are Egypt, most lyMorocco, anchored Kenya, in authentic Tunisia cultural and Tanzania traits and offer nature a wide itself varie. However,ty of quality many accommodation countries on acrossthe continent the spectrum, continue lackranginging the from necessary 5-star accommosupport infrastructuredation to home and servicesstays. Furthermore, to unlock the mir osttourism of Africa’s potential. major cities are served by renowned international hotel groups (e.g. Hyatt, Sheraton, Accor) and, more recently, Southern African operators as well (e.g. Southern Sun,Key tourist Protea destinations Hotels, Serena). such as While South high Africa,-quality Egypt, business Morocco, hotels Kenya, and Tunisia budget and accommodation Tanzania offer facilitiesa wide varie are tyin of fair quality supply, accommodation 2- to 3-star professionallyacross the spectrum,-managed ranging accommodation from 5-star offering accommo valuedation for moneyto home is ,stays. in many Furthermore, instances , mquiostte oflimited Africa’s. Emajorstablishments cities are that served are notby associatedrenowned international with known hotbrandel groups names (e.g. are, Hyatt,more Sheratonoften than, Accor not, )lacking and, more in adequate recently, and/or Southern consistent African qualityoperators standards. as well (e.g.Countries Southern like SouthSun, Protea Africa, Hotels,Kenya, Serena).Tunisia andWhile Morocco high-quality have bwellusiness-functioning hotels andand budgetmarket -accommodationbased grading systemfacilitiess, whileare in many fair supply, others 2are- to new 3-star at implementingprofessionally -gradingmanaged systems accommodation. offering value for money is, in many instances, quite limited. Establishments that are not associated with known brand names are, more often than not, lacking in adequate and/or consistent quality standards. Countries like ThisSouth report Africa, provide Kenya,s an Tunisia overview and of Moroccothe existing have business well-functioning hotel segment and inmarket fast-growing-based businessgrading system nodes sof, whileselected many East others and West are newAfrica atn countriesimplementing, a synopsis grading ofsystems key performance. trends pertinent to their tourism sector and business hotel industries, as well as an indication of possible development opportunities. Such rapidly growing business nodes are likely to continue attracting both domestic and foreign investmentThis report provideand tradings an overview activity thatof the will, existing in turn, business create hotel a need segment for thein fast establishment-growing business or refurbishment nodes of selected of supporting East and infrastructure, West African countriesparticularly, a in synopsis the business of key hotel performance segment. tre nds pertinent to their tourism sector and business hotel industries, as well as an indication of possible development opportunities. Such rapidly growing business nodes are likely to continue attracting both domestic and foreign investmentAccording to and the tradingStandard acti Industrialvity that Classification will, in turn, (SICcreate Code a need– 64101) for , thethe accommodationestablishment or industry refurbishment consists ofof hotels,supporting camping infrastructure, sites and particularlyother provisions in the ofbusiness short-stay hotel accommodation, segment. restaurants, bars and canteens. Business dictionaries typically define a “hotel” as a commercial establishment providing lodging, meals and guest services. According to the Standard Industrial Classification (SIC Code – 64101), the accommodation industry consists of hotels, camping sites and otherThe focus provisions here isof onshort business/commercial-stay accommodation, hotels restaurants, bars and canteens. Business dictionaries typically define a “hotel” as a thatcommercial cater mainlyestablishment for business providing clients lodging, – thatmeals is, and guest services. people who are in the area for business purposes, orThe tofocus attend here ais onconference business/commercial or gathering hotels. A business/commercialthat cater mainly for hotel business may be clients described – that as anis, establishmentpeople who are that in theusually area foroffer businesss: room purposes, service; orcatering to attendfacilities a suchconference as a ordining gathering room,. Aa business/commercialrestaurant, a coffee hotelshop may or bea cocktaildescribed lounge as an; Nigeria Ethiopia establishmentlaundry and valet that serviceusually; asoffer wells: asroom a businessservice; Togo centre with internet, computers, fax services and Ghana Uganda catering facilities such as a dining room, a Kenya Rwanda Nigeria

Cote d'Ivoire Ethiopia restaurant,secretarial services.a coffee shopThese orhotels a cocktail are normallylounge; Burundi laundryclassified and into valet star gradingservice; categoriesas well as ranging a business from Tanzania Togo 1cent-starre towith 5-star internet,s. computers, fax services and Ghana Uganda Kenya Rwanda Malawi secretarial services. These hotels are normally Cote d'Ivoire Burundi The following twelve countries are reviewed in this classified into star grading categories ranging from MozambiqueTanzania 1report:-star to 5Burundi,-stars. Ethiopia, Kenya, Malawi, Mozambique, Rwanda, Tanzania and Uganda in Malawi TEasthe followingAfrica; as twelve well as countries Côte d ’Ivoire,are review Ghanaed ,in Togo this Mozambique report:and Nigeria Burundi, in West AfricaEthiopia,. Kenya, Malawi, Mozambique, Rwanda, Tanzania and Uganda in EastAccording Africa; to asthe well World as Bank’sCôte d ’Ivoire,African GhanaDevelopment, Togo Indicators (2011), Kenya has the largest economy in East Africa. As indicated in the andfollowing Nigeria table, in West its gross Africa domestic. product (GDP) at market prices stood at USD 31.4 billion in 2010, as compared to Ethiopia’s USD 29.7 billion. Ethiopia’s real GDP growth averaged 8.5% per annum over the period 2002 to 2010, but is estimated to have slowed to 7.7% in According2011 (World to Bankthe World - Global Bank’s Economic African Prospects,Development January Indicators 2012). (2011) Addis, Kenya Ababa, has the the capital largest city economy of Ethiopia, in East is also Africa. known As asindicated “the political in the followingcapital of table,Africa”. its gross domestic product (GDP) at market prices stood at USD 31.4 billion in 2010, as compared to Ethiopia’s USD 29.7 billion. Ethiopia’s real GDP growth averaged 8.5% per annum over the period 2002 to 2010, but is estimated to have slowed to 7.7% in 2011 (World Bank - Global Economic Prospects, January 2012). Addis Ababa, the capital city of Ethiopia, is also known as “the political capital of Africa”.

Introduction

Kenya’s economy is also regarded as the most advanced in East Africa, while also being an important transportation, communication and financial hub within the region. Furthermore, the integration of Rwanda and Burundi into the East African Community (EAC), thereby joining Kenya, Tanzania and Uganda, is contributing significantly towards Kenya being recognised as a prime transit location, since most flightsKenya ’sto economythe region is pass also through regarded Nairobi’s as the mostJomo advanced Kenyatta Internationalin East Africa, Airport. while also being an important transportation, communication and financial hub within the region. Furthermore, the integration of Rwanda and Burundi into the East African Community (EAC), thereby joining Kenya, Tanzania and Uganda, is contributing significantly towards Kenya being recognised as a prime transit location, since most The Mozambican economy has Africa: Selected socio-economic indicators recordedflights to therapid region economic pass through growth Nairobi’s for JomoCountry KenyattaPopulation International Select Airport. economic indicators in 2010 Average annual FDI stock as a ratio of in 2010 at market prices growth at constant GDP many years, with demand for mineral (millions) prices: 2006 to 2010 resources underpinning much of the The Mozambican economy has GDPAfrica: (USD SelectedGFCF (USD socio-economic FDI (USD indicatorsGDP (% ) GFCF (%) 2006 (%) 2010 (%) recordedforeign inve rapidstor economic interest growthin recent for Country Population Selectbillion) economicbillion) indicatorsmillion) in 2010 Average annual FDI stock as a ratio of Burundi in 8.52010 1.6 at market- prices 14 growth4.1 at constant- 3.9 GDP 6.1 times.many years,Tanzania with demandalso experienced for mineral (millions) prices: 2006 to 2010 Cote d’Ivoire 19.7 22.8 3.2 418 2.2 - 25.8 29.2 rapidresources growth, underpinning averaging much 6.8% of perthe Ethiopia 82.9 29.7 6.4 184 10.4 14.4 22.2 15.4 GDP (USD GFCF (USD FDI (USD GDP (% ) GFCF (%) 2006 (%) 2010 (%) annumforeign overinve thestor periodinterest 2000 in to recent2010. Ghana 24.4 billion)31.3 billion)7 million)2 527 6.5 - 22.1 51.1 Thetimes. gold Tanzania mining industry,also experienced along with BurundiKenya 40.98.5 31.41.6 6.4- 13314 4.14.6 9.7- 5.23.9 6.17 the tourism and agricultural sectors, CôteCoteMalawi d’Ivoire 19.715.7 22.85.1 3.21 418140 2.27.4 - 25.832.4 29.218.5 rapid growth, averaging 6.8% per EthiopiaMozambique 82.923.4 29.79.6 6.42.3 184789 10.47.2 14.419.3 22.239.3 15.459.9 annumhave beenover thekey period to the2000 country’sto 2010. GhanaNigeria 158.424.4 193.631.3 7- 26 527099 6.56.4 - 22.121.5 51.127.2 Theeconomic gold miningperformance. industry, along with KenyaRwanda 40.910.3 31.45.6 6.4- 13342 4.67.5 9.7- 5.23.3 7.77 MalawiTanzania 15.744.8 5.123 6.91 140700 7.46.9 11.3- 32.436.2 18.532.4 the tourism and agricultural sectors, MozambiqueTogo 23.46 9.63.2 2.3- 78941 7.22.7 19.3- 39.335.7 59.929.8 Accordinghave been tokey theto theInternational country’s NigeriaUganda 158.433.8 193.617 3.9- 6848 099 6.48 9.2- 24.221.5 27.231.9 Monetaryeconomic performance.Fund’s World Economic RwandaSource: World Bank, UNCTAD10.3. 5.6 - 42 7.5 - 3.3 7.7 Sunbird Mount Soche Tanzania 44.8 23 6.9 700 6.9 11.3 36.2 32.4 Outlook, Ghana had the second-fastest Togogrowing economy in6 the world3.2 in 2011, -after Qatar.41 This West2.7 African- economy35.7 recorded29.8 GDP Accordinggrowth of 13.5% to lastthe year, International compared to anUganda average of approximately33.8 6.5%17 per annum3.9 over848 the period8 2006 to 9.22010. Moreover,24.2 Ghana31.9 has Monetaryattracted significantFund’s lyWorld higher Economic foreign direct Source investment: World Bank, UNCTAD(FDI). inflows in recent years, which rose from USD 58.9 million in 2002 to USD 2.5 Sunbird Mount Soche

Outlook,billion by Ghana2010. had the second-fastest growing economy in the world in 2011, after Qatar. This West African economy recorded GDP growth of 13.5% last year, compared to an average of approximately 6.5% per annum over the period 2006 to 2010. Moreover, Ghana has attractedNigeria, Africa's significant mostly higherpopulous foreign country, direct is investmentalso the economic (FDI) inflows powerhouse in recent of years, West whichAfrica randose thefrom world's USD 58.9 seventh million-largest in 2002 exporter to USD of 2oil..5 Itbisllion oil bysector 2010. accounts for 70% to 80% of the federal government’s revenue, depending on the oil price level, around 90% of export earnings and approximately 25% of GDP. In terms of FDI inflows, Nigeria was the second-largest African recipient over the period 2008 to 2010,Nigeria, amount Africa'sing most to USD populous 6.1 billion country, in the islatter also year the andeconomic USD 23 powerhouse billion over ofthe West period Africa. and the world's seventh-largest exporter of oil. It s oil sector accounts for 70% to 80% of the federal government’s revenue, depending on the oil price level, around 90% of export earningsCôte d’Ivoire and isapproximately highly dependent 25% ofon GDP. agricultur In termse and of relate FDI dinfl sectorsows, Nigeria for its economiwas the secondc wellbeing.-largest The African country recipient is the world’s over the largest period producer 2008 to 2010,and export amounter ofing cocoa to USD beans, 6.1 billion whilst in alsothe latterbeing year a substantial and USD 23producer billion overand theexporter period of. coffee and palm oil. Severe political turmoil was experienced in recent times, with violent clashes following the 2010 presidential elections. This, along with economic sanctions, had a cripplingCôte d’Ivoire effect is onhighly the dependenteconomy, witonh agricultur GDP contracte anding relate by d5.8% sectors in 2011. for its economiHowever,c wellfuturebeing. prospects The country are somewhat is the world’s more largest promising producer, with andGDP export forecaster of to cocoa grow beans,by 4.9% whilst in 2012also beingand 5.5%a substantial in 2013. producer Substantially and exporter higher of government coffee and palmspending, oil. Severegradually political reviving turmoil investor was experiencedconfidence and in recenta return times to a ,more with stableviolent poli clashestical environment following th,e should 2010 presidentialunderpin the elections. recovery momentum This, along. with economic sanctions, had a crippling effect on the economy, with GDP contracting by 5.8% in 2011. However, future prospects are somewhat more promising, with GDP forecast to grow by 4.9% in 2012 and 5.5% in 2013. Substantially higher government spending, gradually reviving investor confidence and a return to a more stable political environment, should underpin the recovery momentum.

Business hotel industry in select East and West African countries

BURUNDI

Tourism sector Burundi’s identifiable natural tourism assets are somewhat limited in relative terms, apart from debatable claims to being home to the source of the River Nile as well as the reputed site where explorers Stanley and Livingstone met, coupled with the faded grandeur of its capital, Bujumbura. The country’s finest features for International tourist arrivals in Burundi 250 visitors are its people and cultural aspects. However, the potential of its tourism sector will remain highly dependent on efforts to re-establish and sustain peace. 200

According to the World Travel and Tourism Council 150 (WTTC), passenger arrivals in Burundi increased from a mere 29 000 in 2000 to 214 000 in 2007, as illustrated in

100 the adjacent graph. Tourist arrivals declined by 37% in 2008 and by a further 0.6% in 2009, largely attributable to Number of tourists arrivals (000s) arrivals tourists of Number the global financial crisis. A growth of 5.6% was recorded 50 in 2010, with 143 000 visitors entering the country. The number of tourist arrivals in Burundi is still very low, but 0 the figure has more than tripled since 2000. Business 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: WTTC tourism statistics were unavailable at the time of writing.

Business hubs The capital city, Bujumbura, serves as Burundi’s administrative and economic centre, as well as the principal communication and transport hub, being the principal exit/entry port for its exports/imports. Gitega, the second-largest city, houses the famous Burundi National Museum. International trading and investment activity is relatively limited in Burundi (foreign direct investment (FDI) inflows amounted to only USD 14 million in 2010) and its expansion potential is expected to remain somewhat subdued in the medium-term.

Business travel accommodation

Burundi has more than one hundred hotels with a combined total of approximately 1 500 Popular hotels in Burundi rooms. More than half of the hotels are concentrated in Bujumbura, with others scattered Alexestel Hotel around the country. Hotel rates range between USD 80 and USD 200. However, rates at the Bright Hotel Clos Des Limbas cheaper hotels in the city centre may range from USD 40 to USD 80. Room and bed Dolce Vita Resort occupancy1 rates for Burundi were not available at the time of writing. Dorado Hotel Hotel Amahoro Hotel Club du Lac Tanganyika Hotel de la Palmeraie Identified gaps in the business hotel industry Hotel Source du Nil Le Bouquet There are no major hotel projects in Bujumbura at this point in time. However, the city is a hub New Parador for conferences and regional summits and, as such, there is a project underway to construct Sun Safari Hotel an international conference centre, which would eventually require 5- and 4-star Top Hill Residence accommodation for the anticipated business tourists. A gap in the business hotel industry may Ubuntu Residence Village Hotel also exist in the refurbishment or upgrading of existing facilities. Waterfront Hotel Source: Burundi Tourisme

1 The “occupancy rate” reflects the relationship between available capacity and the extent to which it is used. Such a rate may refer to either the use of rooms or that of beds. Occupancy rates are based on the number of nights spent. 6

Business hotel industry in select East and West African countries

CÔTE D’IVOIRE

Tourism sector Tourism data was not available at the time of writing, as Côte d’Ivoire’s Tourism Department has not published the pertinent information for an analysis of recent developments in the sector.

Business hubs The business environment is beginning to recover, with increasing activity recorded in the oil and gas sector. This should gradually encourage the return of foreign investors to the country, although an understandably high degree of caution is likely to prevail for some time. The country’s economic capital, Abidjan, is characterized by a relatively high level of industrialization. It was also considered one of West Africa’s principal cultural hubs and most government offices and foreign embassies are located in this city. Proposals to build oil refineries in Abidjan and San Pedro are expected to bring almost USD 10 billion in new investments. Yamoussoukro was designated the official political, administrative and transportation centre of Côte d’Ivoire in 1983. This city’s economy also benefits from the perfume, fishing and forestry industries.

Business travel accommodation Popular hotels in major Cote d'Ivoire cities The southern region of Côte d’Ivoire has a number of first-class Business Hotel Name Class (1 to 5-star ) Number of rooms ABIDJAN hotels, although the good establishments are concentrated in Assonvon 3 65 Abidjan. There are four popular 5-star hotels in this region, Birango 2 24 namely the Ivoire Intercontinental, the Sofitel and the Tiama in Clement 2 26 Abidjan, as well as the Hotel de la Paix in Daoukro. The Ekoumatan 1 26 Elite 1 29 President Hotel is the only 5-star hotel in the centre of Golf 4 306 Yamoussoukro. The average room rate per night in these hotels Hibiscus 2 39 ranges from USD 74 to USD 266. Hotel du Nord 2 33 Ibis Marcory 3 131 Ibis Plateau 3 192 The adjacent table lists the popular hotels, their respective Ivoire Intercontinental 5 750 Marly 3 33 star-grading and number of rooms in the cities of Nadi 1 10 Abidjan, Yamoussoukro, Daoukro, Assinie, Grand Basam and Novotel 4 255 Grand-Bereby. Patient 2 18 Sofitel 5 216 Stop 3 34 Terminus 2 39 Occupancy rates Tiama 5 150 Room and bed occupancy rates for Côte d’Ivoire were not YAMOUSSOUKRO Akraya 3 39 available at the time of writing. Bonheure I 3 52 Bonheure II 3 50 Motel Agip 1 12 Identified gaps in the business hotel industry President Hotel 5 284 Royal Hotel 3 36 Despite the many hotels on offer in Abidjan, some of these are DAOUKRO in need of refurbishment and upgrading. Similarly, most of the Hotel de la Paix 5 53 accommodation facilities in Yamoussoukro, Daoukro, Bouake, ASSINIE Grand-Bassam and Assinie require refurbishment, expansion African Queen Lodge 4 13 and upgrading in order to meet international standards. Club Mediteranee 3 250 Les Marines de Babihama 3 42 GRAND BASAM However, security concerns are likely to deter investor interest Etoile du Sud 4 42 in Côte d’Ivoire’s business hotel industry until there is greater Nsahotel 3 69 certainty over the sustainability of peace and generalised safety GRAND-BEREBY for foreign travellers. La Baiae Des Sirenes 4 59 Source: TripAdvisor and tourismeci.org 7

Business hotel industry in select East and West African countries

ETHIOPIA

Tourism sector

The number of tourist arrivals in Ethiopia increased from International tourist arrivals in Ethiopia 450 148 438 in 2001 to 412 341 in 2009, representing a 13.6% average annual growth rate. The number of business 400 tourists increased by 73% from 26 577 in 2001 to 46 008 350 in 2005, with data being unavailable from 2006 onward. 300

250

Tourism data is indeed a challenge in Ethiopia. The 200 number of tourist arrivals may be misleading because it 150 includes a large number of passengers in transit in Addis Ababa. Tourism statistics need to be improved in order to 100 Number Number of tourists arrivals (000's) provide a clear picture of the status of this sector and to 50 permit improvements in service delivery by the relevant 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 authorities. International Tourists Business tourists Source: World Bank, Overseas Development Institute (2009) and Europa World Yearbook (2011)

Business hubs

Addis Ababa is not only the capital city but also the economic centre of Ethiopia. It is also where the African Union (AU) is based, as was the case with its predecessor, the Organization of African Unity (OAU). Consequently, Addis Ababa is often referred to as "the political capital of Africa" due to its historical, diplomatic and political significance on the continent. From a travel perspective, other major Ethiopian cities like Arba Minch, Axum and Lalibella are considered to be leisure destinations rather than business nodes per se.

Business travel accommodation

Ethiopia has a relatively small number of hotels, Number of hotels in Ethiopia Number of rooms particularly at the upper end, considering the role it Regional States 5-star 4-star 3-star 2-star 1-star Total plays on the political and economic fronts. Addis Ababa 3 13 27 32 7 82 4 295 Amhara 0 0 5 1 10 21 552 Furthermore, in relative terms its hotel industry is Dire Dawa 0 0 1 2 5 10 294 generally of a poor standard. Gambela 0 0 0 0 1 1 22 Harari 0 0 0 1 2 8 140 Oromia 0 0 0 7 12 34 1 629 The country has only 50 hotels in the 5-, 4- and 3- SPNN 0 0 0 3 12 20 434 Tigrai 0 1 2 3 8 22 561 star categories, and very few outside Addis Ababa Total 3 14 33 49 57 198 6 927 (i.e. a total of 9 hotels in these categories outside of Source: Overseas Development Institute (2009) the capital city area).

This is a supply-side constraint to developing an upmarket tourism segment, which is exacerbated by the failure of the classification system to enforce international standards.

Occupancy rates Addis Ababa has high room occupancy rates, particularly at the top-end of the market, attributable to the lack of high-quality hotels. The average room occupancy rate in the capital city’s mid-range segment stands at just over 61% through the various seasons. The low-end hotels in Addis Ababa, in turn, are used almost exclusively by the domestic business market segment and typically experience considerable seasonal variations.

Business hotel industry in select East and West African countries

According to an Overseas Development Institute (2009) Room occupancy rates in four Ethiopian cities 100 report, the lack of seasonality in the conference and 90 business travel segment, together with a significant 80 leisure component, contribute substantially to the high 70 occupancy rates prevailing in Ethiopia’s hotel industry, 60 particularly in its capital city. 50

40 Other destinations outside Addis Ababa are more Percentages 30 dependent on the leisure market than on business 20 patrons. Room occupancy rates in the Arba Minch area 10 are generally above 55% throughout the seasons, while 0 those for Axum and Lalibela are typically above 40% Addis top-end Addis mid-range Addis low-end Arba Minch Axum Lalibella during the high and average seasons, as indicated in the High season Average Low season Source: Overseas Development Institute (2009) accompanying figure. Top-end hotels include all 5-star and 4-star hotels, Mid-range hotels include all 3 star and 2-star hotels, Low-end hotels include all 1-star and unclassified hotels

Identified gaps in the hotel industry Despite the previously mentioned challenges posed by tourism statistics in Ethiopia, the high occupancy rates reported in Addis Ababa throughout the year, as well as in other parts of the country during the high season, point towards a need for an expanded supply of good quality hotel accommodation throughout the country in order to improve the competitiveness of its tourism offer.

GHANA

Tourism sector Tourism is a rapidly growing industry in Ghana. The sector has reported steady growth, with its turnover having risen from an estimated USD 836 million in 2005 to USD 1.88 billion by 2010. The tourism sector ranks fourth amongst the Ghanaian economy’s foreign exchange earners, whilst contributing an estimated 6.2% of GDP in 2010.

International tourist arrivals in Ghana International tourist arrivals increased from 428 533 in 1000 2005 to 930 000 in 2010, largely attributable to the 900 expanding number of air connections between Accra’s 800 Kotoka International Airport and destinations worldwide, 700 which rose from 12 in 2005 to 24 in 2011. 600 500 Business tourist arrivals increased from 92 840 in 2005 to

400 184 639 in 2009, whereas conference tourist arrivals rose

300 from 36 687 to 72 250 over this period (note that this level

Number Number of arrivalstourist (000s) 200 of segmentation is not available for the remaining years depicted in the chart). 100

0 2005 2006 2007 2008 2009 2010 The purposes of travel included business (23%), Tourists Arrivals Business Conference

Source: Ghana Tourist Board conference/meetings (9%), visiting friends and relatives (25%), holidays (10%), study/training (8%), medical (1%), and other motivations (15%). The main overseas sources of international tourists are the United States of America (USA), the United Kingdom (UK), Germany, France, the Netherlands, Canada, Switzerland, Italy, China, India and Lebanon. African country sources of foreign tourists include Côte d’Ivoire, Nigeria, Togo, Burkina Faso, Liberia, Sierra Leone and South Africa.

Business hotel industry in select East and West African countries

Official statistics appear to indicate that business travellers constitute around 40% of tourists arriving in Ghana. However, the real contribution of the business segment has been estimated at 50%, including the unrecorded number of Ghanaian residents travelling to and from the capital, as well as business visitors emanating from neighbouring countries.

Business hubs Accra serves as Ghana’s economic and administrative hub, being also its centre of culture and tourism. Economic activities in Accra include the financial and commercial sectors, Atlantic fishing and the manufacturing of food products, lumber products, textiles and clothing, as well as chemicals, among others.

Kumasi is the second largest city in Ghana and home to the Royal family. This city is known for many beautiful species of flowers and plants, with its major exports including hardwood and cocoa. Takoradi is Ghana's fourth-largest city, as well as an industrial and commercial centre. Its chief industries include plywood and other timber processing, shipbuilding and railroad repair and, very recently, the oil industry. Other cities in Ghana include Koforidua, Tamale, Achiaman, Cape Coast, Teshie, Tema, Obuasi and Sekondi.

Business travel accommodation The number of hotels in Ghana increased from 1 345 (18 752 rooms) in 2005 to 1 775 (26 047 rooms) in 2009, according to the Ghana Tourist Board. The largest concentration is found in Accra, particularly in the 5-, 4- and 3-star categories.

Nevertheless, according to the Popular hotels in selected Ghananian cities Oxford Business Group (2011), ACCRA the 4-star and 5-star segments 5-Star 4-Star 3-Star 2-Star Ungraded are still short of an estimated Lebadi Hotel Golden Tulip African Royal Hotel Court Gardens 1 200 to 1 500 additional rooms – His Majesty’s Hotel Alisa Hotels Crystal Palm hence the high room rates. La Palm Royal De Holiday Beach Hotel GS Plaza Hotel Movenpick Hotel Erata Hotels Hotel Hansonic

Novotel Hotel Fiesta Royal Midindi Hotel However, a few hotels have been The African Regent Grand View constructed in the past two years, Travel Express Int. Holiday Inn largely driven by the emerging oil Villa Monticello La Villa Boutique industry. Western Premier PH Hotel Ramada Resort According to a Renaissance KUMASI Capital (2011) study, Ghana’s 5-Star 4-Star 3-Star 2-Star Ungraded Golden Tulip Crystal Rose Hotel Treasure Land Amis Wonderland hotels and restaurants sector Kessben Travel & Tours Resort Hotel Georgia Hotel Wadoma Royal expanded by 11.3% in 2010, Miklin Hotel Maplewood Hotel attributable to business arrivals Promising Stars in Accra. Silicon Hotel TAKORADI Room rates in the 5-star hotel 5-Star 4-Star 3-Star 2-Star Ungraded segment range from USD 350 to Abuesi Beach hotel USD 500, while average room African Rainbow Resort Melody Hotel rates for other star categories Raybow International range from USD 50 to USD 350. Stellar Lodge Takoradi Beach Hotel Source: TripAdvisor and Businessghana.com Renowned international hotel brands present in Ghana include the Holiday Inn, Novotel, Golden Tulip, Best Western and Radisson Blu, amongst others. The Marriot and Hilton chains announced their entry into the Ghanaian hotel industry in 2012.

Business hotel industry in select East and West African countries

Occupancy rates

Room occupancy rates in Ghana rose consistently over Room occupancy rates in Ghana the period 2002 to 2007 in the 5-star segment, with a 100 similar trend recorded in the 4-, 3- and 2-star categories 90 of the industry (with the exception of 2007, when a drop 80 was reported in the latter two categories). 70 60

Occupancy rates in the 5-star segment reached 94.4% in 50

2007, but declined to 74.1% in 2009 largely due to the Percentages 40 global financial crisis. Occupancy rates in the 3-star and 30

4-star hotel categories averaged 79% and 87%, 20 respectively, in 2009. 10

0 These high occupancy rates indicate a shortage of 2002 2003 2004 2005 2006 2007 5-Star 4-Star 3-Star 2-Star accommodation in Ghana. Source: Ghana Tourist Board (2010)

Identified gaps in the business hotel industry

Accra is deemed to have a sufficient overall number of hotels, although a shortage appears to be evident at the upper end of the industry. Outside the capital city, the business segment is driving tourism sector growth in cities such as Kumasi and Takoradi. Allegedly, Takoradi residents are renting out their houses to corporate clients attracted to the city by the developing oil industry.

The shortage of hotels in these cities presents opportunities for the establishment of upmarket hotels or internationally branded, yet affordable, facilities. Ghana has the opportunity to establish itself as the conference destination of West Africa. Demand for conferences and other business events is taking off due to the expanding volume of business travellers to Ghana. A dedicated and large conference centre has been operational in central Accra for a number of years, but is in need of refurbishment and possible expansion. Furthermore, there may be a need for the establishment of hotels around the city.

KENYA

Tourism sector

Tourism is the second most important generator of foreign International tourist arrivals in Kenya exchange earnings for the Kenyan economy, with the 2 000.0 trade, restaurants and hotels sector contributing an 1 800.0 estimated 16% to GDP in 2010. 1 600.0 1 400.0 International tourist arrivals in Kenya grew by 15% to 1 200.0 1 095 945 in 2010, from 952 481 in 2009. This excludes 1 000.0 cross-border tourist arrivals, which could entail an 800.0 additional 700 000 tourists. Business tourist arrivals 600.0 increased from 98 300 in 2000 to 246 400 in 2004, but (000s) arrivals tourist of Number 400.0 dropped in 2005 to 206 100. The years 2006 and 2007 200.0 0.0 witnessed an increase in business tourists to 226 200 and 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

242 200, respectively. A sharp drop in overall tourist Business tourismTourism TouristTourists arrivals Arrivals arrivals and business travellers was recorded in 2008, Source: Kenyan Ministry of Tourism

Business hotel industry in select East and West African countries

due to the violence associated with the disputed December 2007 polls and the accompanying economic crisis. Tourism revenues grew to 73.68 billion Kenyan shillings in 2010, up from 62.46 billion shillings in 2009 and 65.4 billion shillings in 2007.

Business hubs Business activities are concentrated around the three largest urban centres - Nairobi, Mombasa and Kisumu. The capital city, Nairobi, is a leading hub for business and conference tourism in East and Central Africa. Mombasa, in turn, is the most popular destination for leisure tourists, while Kisumu is one of the fastest growing cities in Kenya. The latter is thriving on the back of rich sugar and rice irrigation industries, whose contribution to the national economy is substantial.

Business travel accommodation Kenya has approximately 265 hotels ranging from 5- to 1-star. Nairobi has 63 hotels, followed by Mombasa (27), Kisumu (12) and the balance in other cities. Some of the hotels are not graded, especially those in small Kenyan cities.

Popular 5-star hotels in Nairobi include the Tribe, Nairobi Serena, Number of hotels in Kenyan cities by star grading

Fairmont, Norfolk, Windsor Golf Hotel, InterContinental Nairobi Number of hotels Total and Panari Hotel. The Funzi Keys hotel is in Mombasa. The City 5-star 4-star 3-star 2-star 1-star Others 265 average room rate for these hotels ranges from USD 225 to USD Nairobi 6 7 6 4 1 39 63 400 per night. Mombasa 1 3 6 18 27

Kisumu 12 12 There are seven 4-star hotels in Nairobi, namely the Sarova Other cities 163 Stanley, Safari Park Hotel, Ole-Sereni, Hilton Nairobi, Nairobi Others: Not Graded Safari Club, Palacine and the Laico Regency Hotel. Mombasa, in Source: TripAdvisor turn, has the Dianie Reef Beach Resort, the Sentido Village Beach Hotel and the Bamburi Beach Hotel. The average rate per night ranges from USD 150 to USD 379.

The Crown Plaza Hotel is apparently the most popular 3-star hotel in Nairobi, ranked 8th for business in the capital city, with the rate per night ranging from USD 175 to USD 328. The Sarova Panafric Hotel was ranked 18th for business in Nairobi, followed by the Jacaranda Hotel, the Sentrim 680 Hotel and the West Breeze Hotel. Out of the six 3-star hotels in Mombasa, three have a business centre (i.e. the Nyali Hotel, the Reef Hotel and the Voyager Beach Resort), while the others are more suitable for leisure and holiday than business tourists.

The 2- and 1-star hotels are normally used by business tourists and local business people requiring a relatively clean hotel at much lower prices. The majority of these hotels are situated in the smaller cities of Kenya.

In 2006, around 93% of Kenya’s accommodation establishments were owned by the private sector, while the state owned just under 7% of the total. International hotel brands in Kenya include Serena, InterContinental, Hilton and Sarova, amongst others.

Business hotel industry in select East and West African countries

Occupancy rates

The hotel bed occupancy rate rose from 33.6% in 2003 to Hotel bed occupancy rates in Kenya 47.2% in 2007, but fell to 26% in 2008 due to political 50.0 instability. Occupancy rates recovered thereafter, reaching 37% in 2009. This was attributed to an 45.0 aggressive marketing campaign and assurances of tourist safety by the Tourism Marketing Board in Kenya. 40.0

According to 2009 occupancy statistics, Europe was the Percentages 35.0 leading source of foreign visitors staying in Kenya’s hotels, followed by the rest of Africa (42%), America (5%), Australia (1%) and others (sharing the remaining 30.0 3%). In terms of hotel bed occupancy by zones, the Coastal Beach areas led the way with 48% (3 011 400 25.0 2002 2003 2004 2005 2006 2007 2008 2009 beds occupied), followed by Nairobi (27%, 1 662 200), Source: Kenyan Ministry of Tourism Central (6%), Western (5%) and Masailand (5%), while the other zones shared the balance.

Identified gaps in the business hotel industry Kenyan cities have an adequate distribution of hotels and other types of accommodation. However, Nairobi and Mombasa account for 34% of the popular and most recognized hotels. Nairobi is deemed to have sufficient hotels, although there is a need to refurbish and rebrand some of the existing facilities, considering their general age. Kisumu, as an up-and-coming city, might present opportunities for the establishment of an upmarket hotel or an internationally-branded, but affordable, facility.

MALAWI

Tourism sector The contribution of tourism to the Malawian economy stands at about 7%. The country managed to maintain the overall number of tourist arrivals at a stable level, while attracting an increasing International tourist arrivals in Malawi 800 business traveller segment despite the adverse impact of the global economic downturn on tourism performances 700 worldwide. 600 500 The number of foreign visitors entering Malawi rose from 227 600 in 2000 to 748 000 in 2010, translating into an 400 average growth rate of 12% per annum. 300 200 In 2009, the rest of the African continent remained the Number Number of tourist arrivals (000s) 100 main source market (574 100 arrivals, or a 76% share of the total), followed by Europe (104 600 arrivals, 14%) and 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 others (76 300 arrivals, 10%). TouristTourists arrivals Arrivals Business Tourists Source: Ministry of Tourism, Wildlife and Culture

Business hotel industry in select East and West African countries

Just over 50% of the foreign tourists who travelled to the country in 2009 did so for business/work related reasons. Those who travelled for leisure and holiday purposes represented 32.5% of the total, while 17% visited friends and family residing in Malawi.

Business tourist arrivals expanded from 125 000 in 2000 to 312 000 in 2006, but fell to 212 000 in 2007. The peak reached in 2006 was largely as a result of the worsening economic situation in Zimbabwe, which saw more traders coming to Malawi to purchase basic commodities for resale in Zimbabwe. The 32% slump in business tourist arrivals in 2007 was followed by a recovery soon after, reaching a peak of 435 000 in 2010. This recovery has been attributed to the new investment incentive packages put in place by government during the 2007/8 fiscal year, as well as to interest in the build-up to and during the 2010 FIFA World Cup hosted by South Africa.

According to the Ministry of Tourism, visitors to Malawi contributed 67 billion Malawian kwacha (MK) to the economy in 2009 (an average of MK 89 800 per tourist), against MK 60 billion in 2008 (an average expenditure of MK 81 566 per tourist). The big spenders were those coming for conferences/conventions (average expenditure of MK 523 410 per tourist), followed by the work/business segment (MK 121 655) and substantially lower down the line by those visiting friends and relatives (MK 22 609).

Business hubs The capital city of Malawi is Lilongwe, while Blantyre and Mzuzu are the second- and third-largest cities, respectively. Lilongwe is the political centre of Malawi, while Blantyre is referred to as the economic, commercial or industrial capital, being home to several major factories (e.g. shoe manufacturing, cotton processing, metal and plastics producing factories).

Mzuzu is a relatively fast-growing city and also a commercial hub producing coffee, fruits, timber, milk and honey. Manufacturing activities in Mzuzu are mostly in the pharmaceuticals, cosmetics and timber spheres. This city is the home base of national companies like Mzuzu coffee, Kentan Products Limited and the Northern Life Magazine.

Business travel accommodation

Blantyre has a number of first-class hotels, List of hotels in major Malawian destination Capacity of conference with the Protea Ryalls and the Sunbird Business Hotel Name Class (1 to 5-star ) Number of rooms facilities Mount Soche providing top-end LILONGWE accommodation. Crossroads Hotel 3 180 1000 Kiboko Town Hotel Not graded 14 - Lilongwe also has a number of first-class Pacific Hotel 2 50 200 hotels, with the Sunbird Capital and Riverview Hotel Not graded 50 70 Sunbird Lilongwe being the best known. Sogecoa Golden Peacock Not graded 110 300 Sunbird Capital 2 183 1000 The old Imperial Hotel was completely Sunbird Lilongwe 1 95 200 renovated and reopened as the Kiboko Wankulu Palace Not graded 30 50 Town Hotel. BLANTYRE Sunbird Mount Soche 3 120 500 Dorvic Hotel 1 90 100 Mzuzu has one quality hotel, the Sunbird Malawi Sun Hotel 3 70 500 Mzuzu, and a number of simple and small Protea Ryalls 4 120 200 Shire Highlands Not graded 45 100 hotels and lodges. Victoria Hotel Not graded 80 500 MZUZU Sunbird Tourism Limited is the largest Sunbird Mzuzu Not graded 50 100 Source: Department of Tourism, Malawi hospitality enterprise in Malawi, owning seven international class hotels and lodge facilities. International hotel brands in Malawi include Protea Hotels and Pacific Hotels, among others.

Business hotel industry in select East and West African countries

Occupancy rates

National room occupancy rates increased from 46% in Room and bed occupancy rates 70 2006 to almost 60% in 2009. Bed occupancy rates, in turn, rose from 31% in 2006 to approximately 55% in 60 2009. The increase could be attributed to the growth in domestic tourism, especially the “business and meetings” 50 segment. 40

Lilongwe, Blantyre and Mzuzu posted higher room 30 Percentages occupancy rates compared to the lakeshore regions and 20 other areas. The last quarter of the year normally records high occupancies, with December being the highest. 10

0 2006 2007 2008 2009 Identified gaps in the business hotel Room Occ. Rate Bed Occ. Rate Source: Department of Tourism industry Malawi has few hotels of international standard due to inadequate investment in the hotel sector. Demand for such accommodation is high, especially along the shores of Lake Malawi, the urban centres and in other major tourist areas. However, there may be a need for additional business hotels taking into consideration the number of business tourist arrivals annually. Furthermore, although Blantyre and Lilongwe do have a number of international standard hotels, some of the existing facilities require refurbishment and/or rebranding. Plans are afoot to build a 1 500-seat international convention centre in Lilongwe, as well as a 1 000-seat convention centre at the COMESA Hall in Blantyre. The construction of these international convention centres presents opportunities for the establishment of upmarket or internationally-branded facilities. Mzuzu is lacking in terms of quality accommodation, thereby leading to high hotel charges. A great deal of business activity takes place in this city, thus presenting an ideal opportunity for new accommodation facilities.

MOZAMBIQUE

Tourism sector Mozambique’s tourism sector has witnessed tremendous expansion since the return of peace and economic stability. It employs more than 35 000 people and the country has more than 5 000 hotels and tourism establishments according to the Economist Intelligence Unit.

International tourist arrivals in Mozambique 2 000 According to the Instituto Nacional de Estatistica de Moçambique (INE), international tourist arrivals increased 1 800 from 1.1 million in 2006 to 1.8 million in 2010. 1 600 Business/conference visitors increased from 310 000 in 1 400 2006 to 351 000 in 2007. A 13% decline in 1 200 business/conference visitors in 2008 was attributed to the 1 000 global economic crisis. 800

600 As illustrated in the accompanying figure, 2009 was the Number of Number arrivals (000) tourist 400 best year to date for international business/conference 200 tourist arrivals (a total of 431 008 visitors), driven by major 0 2006 2007 2008 2009 2010 investment projects in the country (e.g. developments in Tourist arrivalsArrivals Business/ConferenceBusiness/confrence the northern Moatize coalfields) and by preparations for

Source: INE/Migration the 2010 FIFA World Cup in South Africa.

Business hotel industry in select East and West African countries

Foreign business/conference tourist arrivals totalled 405 164 in 2010, representing a 6% decline. In 2010, the rest of Africa remained the top tourist source market (1 465 793 visitors, 79.8% of the total), followed by Europe (219 089, 11.9%), the Americas (102 041, 5.6%), Asia (28 211, 1.5%), Australasia (18 007, 1%) and others (3 002, 0.2%).

International tourist revenues rose from USD 140 million in 2006 to USD 197 million in 2010.

Business hubs Maputo, a major port city bathed by the Indian Ocean, is the capital and largest city in Mozambique. Aluminium, natural gas, bulk electricity, cotton, sugar, cashews, hardwoods and prawns are the chief exports of Mozambique. In addition to being home to one of Africa’s largest aluminium smelters, Maputo also produces cement, pottery, furniture, shoes and rubber products, among others. Beira is the second-largest city, with its port being the gateway for the interior parts of the country as well as for Zimbabwe, Zambia and Malawi. This city is also known for tourism, fishing and trading activities. Tete is an emerging booming province that is rich in mineral resources such as coal, gold, iron and fluorite, amongst others. Other major cities in Mozambique include Nampula, Quelimane, Nacala, and Pemba.

Business travel accommodation

Beds Capacity : Number ofof bedsplaces available available in establishmentsin rooms of establishments for overnight staysfor overnight stays Mozambique’s tourism industry is, nonetheless, CategoryCategory 20062006 20072007 20082008 20092009 20102010 relatively underdeveloped when set against its 4/5-Star4-54-5 Star Star Hotelshotels 2 5052 505 2 8792 879 2 9662 966 3 2783 278 -- huge potential. Apart from the hotels in Maputo, it 3-Star33 Star Star Hotelshotels 3 1253 125 3 1973 197 3 2073 207 3 2813 281 -- consists mainly of small-scale beach lodges and 2-Star22 Star Star Hotelshotels 3 6143 614 3 9853 985 4 3424 342 4 6844 684 -- OthersOthers 6 4966 496 6 9746 974 6 9906 990 7 1697 169 -- bed and breakfast establishments. TotalTotal 15 74015 740 17 03517 035 17 50517 505 1818 412 412 3737 550 550 SourceSource : : DINATAUR DINATAUR The main obstacles to the expansion of the sector include weak infrastructure, skills constraints, uncertainty over land title access, bureaucratic obstructions and expensive international air connections. International hotel brands present in Mozambique include Serena, Southern Sun, Pestana and Radisson Blu, among others. Maputo’s 5-star hotel segment comprises the Polana Serena Hotel, Hotel Avenida, VIP Grand Maputo Hotel and the Afrin Prestige Hotel. The Polana Serena Hotel has 168 rooms and Hotel Avenida offers 159 guestrooms. The VIP Grand hotel has 192 rooms, 6 conference rooms with a capacity for 15 to 250 people Popular hotelsPopular in hotels selected in Maputo Mozambican city cities and a congress centre with a capacity for 5-Star 4-StarMAPUTO 3-Star 1 000 people. The Afrin Prestige Hotel has Hotel Avenida5-Star Southern Sun Maputo 4-Star Hotel Turismo3-Star 100 guestrooms and two meeting rooms with PolanaHotel AvenidaSerena Hotel GirassolSouthern Bahia Sun Hotel Maputo HotelVilla das Turismo Arabias Boutique Hotel VIP Grand Maputo Hotel Girassol Indy Village Hotel Tivoli Polana Serena Hotel Girassol Bahia Hotel Villa das Arabias Boutique Hotel a capacity of up to 100 people each. Average Afrin Prestige Hotel Pestana Rovuma Hotel & Conference Centre Radisson Blu Hotel VIP Grand Maputo Hotel Girassol Indy Village Hotel Tivoli rates for these 5-star hotels range from Hotel Cardoso Afrin Prestige Hotel Pestana Rovuma Hotel & Conference Centre Radisson Blu Hotel Source: TripAdvisor & HotelsCombined USD 300 to USD 450 per night. The hotels Hotel Cardoso are situated within a 1.2km radius of the Source: TripAdvisor & HotelsCombined city centre.

Popular 4-star hotels in Maputo include Southern Sun Maputo, Girassol Bahia Hotel, Girassol Indy Village, Hotel Cardoso and Pestana Rovuna Hotel and Conference Centre. The average rate per night ranges from USD 146 to USD 500. Four 3-star hotels are listed for Maputo as depicted in the accompanying table, with rates ranging between USD 70 and USD 250, but there could be others.

The only 2-star hotel listed in TripAdvisor and HotelsCombined is the Catembe Gallery Hotel. The average rate per night is between USD 80 and USD 151. The Catembe Gallery Hotel is ranked as a hotel of choice for certain types of business people in Maputo, as it is perceived to offer value for money. However, it is located further away from the city centre (five kilometres and across the bay, implying travel by ferry) compared to the other popular hotels in Maputo.

Business hotel industry in select East and West African countries

In addition, Mozambique has a number of popular hotels with good services and affordable prices, but these are not always graded. They include the Vila das Arábias Boutique Hotel, Hotel Vila das Mangas, Hotel Moçambicano, Hotel Tamariz, Hotel Turismo, Monte Carlo and Residential Hoyo Hoyo located in Maputo. Popular hotels in Beira include the Tivoli Beira, Moçambique Hotel and the VIP Inn Beira Hotel, among others. Hotel Zambeze and Hotel Nhungue are the most popular hotels in the northern city of Tete.

Occupancy rates

Hotel occupancy rates in Mozambique edged up slightly Hotel occupancy rates in Mozambique 60.0 to 31.3% in 2010, following comparatively lower rates in the preceding years. 50.0

This improvement may be attributed to the recovery 40.0 from the economic downturn, which has revived travel for both business and leisure purposes, as well as 30.0 increased foreign investor interest in large-scale projects, particularly in the northern parts of the country. rates (%) Occupancy 20.0

10.0 Identified gaps in the business hotel 0.0 industry 2006 2007 2008 2009 2010 Maputo City Maputo Province Tete Province Mozambique Despite the many hotels on offer in Maputo, some are in Source: INE need of refurbishment, whilst most of the accommodation facilities in Beira, Nampula, Quelimane, Nacala and Pemba, among others, require expansion and grading in order to meet international standards. Tete, in turn, is an emerging booming town with a shortage of business hotels. The existing Zambeze Hotel, for instance, has limited accommodation available due to block-bookings by mining houses operating in the Moatize coal region.

NIGERIA

Tourism sector Tourism was selected as one of the Nigerian government’s priority sectors, especially in light of the decline in oil revenues generated. International tourist arrivals in Nigeria increased from 1 031 000 in 2005 to 1 186 800 in 2009, representing 15.1% growth. The number of

International tourist arrivals in Nigeria business tourists, in turn, grew by 17.2% over this period, 1400 from 618 600 to 725 200.

1200 Business arrivals accounted for 61% of tourist arrivals, 1000 while leisure arrivals represented 39% of the total, according to the Nigerian Immigration Service. Nigeria’s 800 inbound tourism flows are estimated by the WTTC (2010) 600 to have increased at a CAGR of 3% since 2007, with this growth being largely driven by government tourism support 400

Number Number of arrivalstourist (000s) programmes and private sector involvement.

200 The UK remained Nigeria’s largest source of tourist 0 2005 2006 2007 2008 2009 arrivals, accounting for 12% of the total, followed by the Tourists Arrivals Business Tourists USA (7%), Canada and South Africa, each claiming a 5% Source: Nigerian Immigration Services (NIS), 2010.

Business hotel industry in select East and West African countries

share in 2009. It is important to note that the vast majority of leisure visitors to Nigeria are Nigerians who are resident abroad - hence these countries remain the largest source of tourists.

Business hubs

Lagos is Nigeria's most prosperous city, with much of the nation's wealth and economic activity concentrated here. Most commercial and financial business is carried out in the central business districts of Lagos Island and Victoria Island, with an increasing number of activities in the Lekki area to the east of Victoria Island. This is also where most of the country's commercial banks, financial institutions and major corporations’ headquarters are situated.

The planning of Abuja and its actual development started in the 1980s, but this city officially became Nigeria’s capital city in 1991, replacing Lagos. Abuja is also home to the headquarters of the Economic Community of West African States (ECOWAS) and the regional headquarters of OPEC. Ikeja is a business-oriented city with factories, government offices and an airport.

Business travel accommodation

Nigeria’s hospitality industry is expanding due to a number of Hotels and other accommodation facilities in Nigeria business and conference travellers to the country, as well as an 2005 2006 2007 2008 2009 increasing domestic travel segment. A string of new hotels of an Hotels 1 880 1 974 2 012 2 046 2 077 international standard, catering almost exclusively to business Other accommodation 1 087 1 125 1 137 1 148 1 163 travellers, have opened predominantly in Lagos and Abuja. The Total 2 967 3 099 3 149 3 194 3 240 accompanying table indicates that the country had 2 077 hotels and Source: NTDC, 2010 1 163 other accommodation facilities in 2009.

Several of the more popular hotels in Lagos and Abuja are listed in the table below. International hotel brands present in Nigeria include the Hilton, Sheraton, Le Meridien, Ibis, Protea, Golden Tulip and Radisson Blu, amongst others. According to The Report: Nigeria (2011), the addition of a rising number of hotels in Number of popular hotels in Nigerian cities by star grade Nigeria is expected to reduce the LAGOS occupancy rates, especially in Lagos 4-Star 3-Star 2-Star where the number of rooms available is Four Points Sheraton Protea Hotel Leadway Ibis Lagos Airport Radisson Blu Anchorage Protea Hotel Victoria Island expected to exceed 5 000. Increased The Moorhouse Ikoyi Protea Hotel Oakwood Park competition is forcing hotels to drop room Sheraton Lagos hotel & Towers Protea Hotel Kuramo Wales rates and to offer more promotional offers. Protea Hotel Ikeja Welcome Centre Hotel The market has thereby been corrected to Southern Sun Hotel Hotel Bon Voyage a considerable extent, as room rates that Federal Pace (Sun International) Protea Hotel Ikoyi Westwood were previously as high as USD 600 have Best Western Plus Ikeja allegedly come down to within the Sheraton Hotel Ikeja USD 300 to USD 400 range at some of Victoria Crown Plaza the top hotels. The Wheatbaker Legacy ABUJA Although travel accommodation in Nigeria 4-Star 3-Star 2-Star is expected to record positive growth in Transcorp Hilton Abuja Protea Hotel Asokoro future years, potential threats may affect Protea Hotel Abuja Protea Apo Apartments Abuja Sheraton Hotel long-term growth. For instance, many Hotel De Bently hospitality facilities in the country are NICON Luxury Hotel operating in contravention of the Nigerian Homewood Suites Tourism Development Corporation Source: TripAdvisor (NTDC) regulations.

Business hotel industry in select East and West African countries

However, the NTDC is in the process of clamping down on non-conforming hotels and other tourism establishments in Nigeria. According to Euromonitor International (2010), the registration process for hospitality facilities is ongoing and will be extended to more Nigerian states. Registration would, furthermore, enable the NTDC to create a national database of hotels and other tourism establishments.

A number of South African hotel brands are present in Nigeria, South African Hotelhotel Brandsbrands in Nigeria as listed in the accompanying table. Protea was the first South Hotel Brandbrand Number of Hotelshotels Number of rooms 10 (Abuja-3, Lagos-6, Warri-1) 606 African hotel group to operate a hotel in Lagos and has Protea 3 under construction 395 expanded to other parts of the country. Protea already operates Southern Sun 1 195 10 hotels with a combined total of 606 rooms in Nigeria and has Legacy 1 65 an additional three under construction (one in Benin City and two Sun International 1 350 in Ikeja). Protea Group chairman, Otto Stehlik, believes that Source: W Hospitality Group room rates will gradually come down over the years as additional accommodation becomes progressively available. However, for the time being, demand is still growing at a strong pace relative to supply.

Occupancy rates Lagos, being Nigeria’s largest commercial centre, has the highest hotel occupancy rates. Most visitors to Nigeria pass through Lagos

Room occupancy rates in Lagos and Abuja before travelling on to other destinations. Occupancy 100 rates in Lagos increased from just over 76% in 2005 to 90 approximately 86% in 2008. A decrease of 25% was,

80 however, recorded in 2010 largely to an increase in the

70 number of hotels in this city.

60 The city with the second-highest occupancy rate is Abuja. 50 This city is mostly a civil service centre, where basically

Percentages 40 every traveller, business people in particular, spend the 30 weekdays and typically move out of the city on Fridays.

20 The room occupancy rate in Abuja increased from 54% in 2005 to almost 62% in 2010. 10

0 2005 2006 2007 2008 2009 2010 2011 Reportedly, room occupancy rates for 2011 were Source: W hospitality Group Abuja Lagos adversely affected by the elections and terrorist attacks.

Identified gaps in the business hotel industry Nigeria possibly has the greatest potential in terms of hotel development in secondary cities compared to most other Sub-Saharan countries. The country is a federation of 36 states, plus the federal capital territory where Abuja is located. Each state has a capital city and a few other cities of note (e.g. Warri, Ife and Eket). There is potential for a chain of mid-scale and/or economy hotels in some 40+ cities throughout the country. In the opinion of the managing director of W Hospitality Group, Trevor Ward, no other country in Africa, with the exception of South Africa, exhibits this kind of potential.

According to Euromonitor International (2010), the Nigerian government is expected to continue to focus its efforts and resources on promoting tourism, which will greatly benefit the country’s travel and tourism industry. Furthermore, with existing hotel players expected to continue their expansion, more international hotels will be set up, particularly in regions with untapped tourism potential. The upgrading and renovation of travel accommodation facilities is also expected to continue in the years to come.

Lagos is challenged by heavily congested traffic, which makes it difficult for business tourists to travel to and from this city. This presents opportunities for the establishment of new hotels, rebranding, expansion and upgrading of existing facilities in order to encourage tourists

Business hotel industry in select East and West African countries

to remain in the city. Lagos state is also planning to build one of the largest conference centres in Africa. Demand for upper and mid-range hotels is likely to rise once the conference centre is operational.

Abuja has a number of international standard hotels providing high-quality services. However, some of the existing facilities require refurbishment and/or rebranding. Cities like Ikeja, Warri, Benin City, Port Harcourt, Asaba, Uyo, Ibadan and Yenagoa also present opportunities for the establishment of upmarket hotels or internationally-branded, yet affordable, facilities. An increased availability of hotels in these cities will save business tourists from travelling long hours to Lagos and Abuja in search of better accommodation.

RWANDA

Tourism sector Tourist arrivals in Rwanda increased substantially from 531 000 in 2006 to 764 827 in 2008, but fell to 698 952 in 2009 and by a further 5% to 666 001 in 2010. As illustrated in the accompanying figure, business tourism data is only available from 2008 onward. Business tourism numbers declined from 344 799 in 2008 to 307 139 in InternationalInternational touristTourist arrivalsArrivals inin Rwanda 900 2010. According to the Rwanda Developmental Board’s 800 statistics for 2009, 89% of business tourists originated

700 from the rest of Africa, followed by Europe (14 183 business travellers, 5% of the total), the Americas (9 708, 600 3%) and others (10 567, 3%). 500 400 The number of business tourist arrivals in Rwanda is

300 expected to increase in future years, with the international convention centre currently under construction in Kigali

Number Number of arrivalstourist (000s) 200 providing a major impetus. Tourism sector growth looks 100 promising in Rwanda, with projects such as cruises on 0 2006 2007 2008 2009 2010 Lake Kivu and the construction of a cultural village in TouristTourists arrivals Arrivals Business/ConferenceBusiness/confrence officials officials Source: RDB Kigali having recently been approved.

Rwanda’s tourism revenue for 2010 was estimated at USD 200 million, compared to USD 175 million in 2009. Leisure tourists are estimated to have contributed 46% of the total revenue. The business category is the second in terms of spending, contributing some 41% of overall tourism revenue.

Business hubs

Kigali, the largest city in Rwanda, has been the economic, cultural and transport hub since it was named the capital after the country gained independence in 1962. The main residence and offices of the President, as well as government ministries, are located in this city. Kigali city has a smelting plant to process the tin ore which is mined in nearby regions. Nevertheless, it is relatively underdeveloped compared to other capital cities in the sub-region. Hence, an extensive programme is under way to develop Kigali’s central business district. The Kigali city project, which is allegedly valued at USD 200 million, is situated on seven hectares of land and includes a shopping mall, a plaza, apartments, hospital facilities, hotels, restaurants and a commuter terminal.

Business travel accommodation

According to the Rwandan Office for Tourism and National Parks (ORTPN), Rwanda’s hotel industry grew steadily from about 600 rooms in 2003 to 4 825 rooms in 2010. At this rate, the country is expecting to have over 10 000 rooms available by 2019.

Business hotel industry in select East and West African countries

Although Rwanda’s hotel accommodation has expanded, Hotel rooms in Rwanda the quality is still relatively low as only 11 hotels out of 6000 almost 200 throughout the country are considered to be within the upper-class category. 5000 4825 4256 4000 Hotels in Rwanda are not currently formally classified in 3552 accordance with any international star grading system 2952 3000

(e.g. 1-star to 5-star). Instead, a simple three-tier 2352 classification system is used to categorise its facilities – 2000 1752 that is, the upper, middle and lower categories. 1052 1000 623 A new initiative of classifying hotels using the East African

Community standard is currently in progress. 0 2003 2004 2005 2006 2007 2008 2009 2010 Source: ORTPN

Upper category hotels in Rwanda Rwanda has 11 upper-category Number of Number of REGION Hotel Name Province District Grade rooms beds hotels with a combined room Hotel des Mille Collines Kigali City Nyarugenge Upper 113 226 capacity of 686, representing 13% of Serena Hotel Kigali City Nyarugenge Upper 104 208 KIGALI Top Tower Kigali City Gasabo Upper 48 96 the total rooms in Rwanda. Five of Lemigo Hotel Kigali City Upper 96 182 these upper-category hotels are Novatel Umubano Kigali City Gasabo Upper 96 192 located in Kigali city, while others are Kivu Sun Hotel Western Region Rubavu Upper 65 166 Nyungwe Ecolodge Western Region Nyamasheke Upper 24 48 in the Western, Northern and Eastern OUTSIDE Virunga Lodge Northern Region Musanze Upper 6 16 regions. Hotel rates range between KIGALI Sabyinyo Silverback Lodge Northern Region Musanze Upper 9 18 Mountain View Lodge Northern Region Musanze Upper 25 50 USD 200 and USD 500. Akagera Game Lodge Eastern Region Kayonza Upper 60 120 Middle category hotels in Rwanda The country has 30 hotels in the Number of Number of REGION Hotel Name Province District Grade rooms beds middle category, 21 of which are Sky Hotel Kigali City Nyarugenge Medium 25 50 located in Kigali city and the Castel Hotel Kigali City Nyarugenge Medium 23 46 Iris Hotel Kigali City Nyarugenge Medium 17 34 remainder in other provinces. Kigali‘s Ninzi Hill Hotel Kigali City Gasabo Medium 15 35 middle category hotels have 600 Hotel le Garni du Centre Kigali City Nyarugenge Medium 11 22 rooms (74% of the country’s total) Impala Hotel Kigali City Nyarugenge Medium 24 38 Orange Courts Kigali City Gasabo Medium 15 22 and 1 190 beds (73%). Hotel rates in Banana Boutique Hotel Kigali City Nyarugenge Medium 7 10 this category range between USD 50 Golden Hills Hotel Kigali City Nyarugenge Medium 31 67 and USD 150. Sport View Hotel Kigali City Gasabo Medium 40 74 KIGALI Top Tower Kigali City Gasabo Medium 48 96 Beau Sejour Hotel Kigali City Gasabo Medium 34 68 Select Boutique Hotel Kigali City Gasabo Medium 7 14 Civitas Hotel Kigali City Gasabo Medium 15 27 Michael Den's Hotel Kigali City Gasabo Medium 31 62 Stipp Hotel Kigali City Nyarugenge Medium 50 107 La Palisse Club Hotel Kigali City Gasabo Medium 72 130 Hotel Okapi Kigali City Nyarugenge Medium 34 86 Alpha Palace Hotel Kigali City Gasabo Medium 38 76 Hotel chez Lando Kigali City Gasabo Medium 32 64 Gorillas Hotel Kigali City Nyarugenge Medium 31 62 Peaceland Hotel Western Rubavu Medium 29 64 Stipp Hotel Western Rubavu Medium 27 65 Le Belvedere Western Rubavu Medium 26 52 Moriah Hill Western Karongi Medium 18 36 OUTSIDE Golden Monkey Hotel Southern Nyamagabe Medium 22 30 KIGALI Gorillas Nest Lodge Northern Musanze Medium 47 94 La Palme Northern Musanze Medium 12 24 Hotel Credo Southern Huye Medium 29 63 Pacis Hotel Southern Huye Medium 6 12 Source: ORTPN 21

Business hotel industry in select East and West African countries

Occupancy rates

Room occupancy rates in Rwanda have risen over the Room and bed occupancy rates in Rwanda past few years, specifically from just over 30% in 2007 to 60 approximately 55% in 2009. A decrease to 49.3% was, 50 however, recorded in 2010, largely due to the decline in visitor arrivals. 40

Bed occupancy rates, however, increased significantly 30 from just under 20% in 2007 to almost 35% in 2010. Percentages 20 Bed and room occupancy rates are expected to rise in future, propelled by the construction and completion of 10 the new international convention centre and the 0 upgrading of existing infrastructure in Kigali’s central 2007 2008 2009 2010 Room occ.Occ. rate Rate Bed occ.Occ. rate Rate business district. Source: Rwanda T-stats.

The average room occupancy rate for the Room occupancy rates by category in Rwanda, 2008 upper-category segment of hotels stood at 70% in Room Hotel category Type of clients occupancyOccupancy 2008, with foreign visitors accounting for 97% of Upper Categorycategory 70% 97% are foreign visitors; 3% are residents the bed nights sold, and Rwandan residents for the Middle Categorycategory 46% 80% are foreign visitors; 20% are residents remainder. Lower Categorycategory 32% 43% are foreign visitors; 57% are residents Source: Rwanda T-stats.

The middle and lower category room occupancy rates were 46% and 32%, respectively, whilst 80% of the occupancy in the middle category was attributed to foreign visitors and 57% of occupancy in the lower category hotels was attributed to Rwandan residents.

Identified gaps in the business hotel industry

A new strategy has been unveiled to promote high-end tourism in Rwanda, with products being developed to cater for this profile of foreign visitors. The new convention centre under construction in Kigali is expected to be completed in 2012.

Kigali city is presently oversupplied with hotels, but demand for upper and middle category accommodation is likely to increase once the convention centre is operational. The Rwandan Tourism Board is currently working on the grading system of the country’s hotels.

Data on hotels in need of refurbishment or expansion will probably become available once the grading of the hotels has been completed.

Business hotel industry in select East and West African countries

TANZANIA

Tourism sector

Tourism is among the key growth sectors in Tanzania due to its natural attractions, which placed the country in 2nd place worldwide according to the Economist Intelligence Unit (EIU). The country boasts twelve national parks, game reserves, unique landmarks such as Mount Kilimanjaro, the Serengeti, the Ngorongoro craters and the spicy islands of Zanzibar, all of which are important tourist attractions. Tanzania’s 800km coastline with splendid beaches, as well as its historical sites and rich cultural traditions, also form a solid base for its tourism offer.

International tourist arrivals in Tanzania International tourist arrivals increased gradually from 900 525 000 in 2001 to 770 376 in 2008, representing a 47% 800 increase. Foreign tourist arrivals fell by 7% in 2009,

700 largely attributable to the impact of the global economic and financial crises, which discouraged visitors from 600 travelling. 500 400 In 2009, the rest of Africa remained the main source of

300 tourists (343 283 arrivals, or 48% of the total), followed

Number Number of tourists arrivasls (000s) by Europe (239 292, 33%), the Americas (67 896, 10%), 200 East Asia and the Pacific (31 155, 4%), South Asia 100 (21 620, 3%), and the Middle East (11 121, 2%). 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 According to the EIU, Tanzania welcomed 749 000 Tourist Arrivals Business & Professional Tourists

Source: Ministry of Natural Resources and Tourism tourist arrivals in 2010, with figures for 2011 expected to have been between 900 000 and one million.

Business tourists account for around 4% of total tourist arrivals in Tanzania, while leisure and holiday tourists represent 90% of foreign tourist arrivals. Business tourist arrivals have been decreasing since 2003, from 133 000 in that year to 28 890 in 2009. This fall might be attributable to certain problems facing Tanzania’s tourism sector, including relatively poor transport and tourism infrastructure, lack of training and skills among workers in the industry. The World Economic Forum’s Travel and Tourism Competitiveness Report 2011 placed Tanzania in 110th position out of 139 countries (98th place in the previous year) due to these constraints.

Business hubs Dar es Salaam is the country’s capital city as well as its principal commercial centre. Most of the Tanzanian government’s departments and state institutions are located in Dar es Salaam. It is also the major seaport for the country and for its landlocked neighbours.

In addition to being the gateway to several of Tanzania’s principal tourist attractions, such as Mount Kilimanjaro, Arusha is also a business city and the home to the headquarters of the East African Community, thus attracting a substantial number of visitors from the regional bloc’s member states. Mtwara is an up-and-coming city, especially for business activities related to mining, gas and the Mtwara corridor.

Business travel accommodation

Tanzania has a variety of accommodation facilities ranging from 1-star to 5-star hotels in different cities. Although some of the hotels are not graded, they may be operating in conformance with international standards. According to the Tanzania Tourism Master Plan, the total room capacity in 2002 was estimated at 10 020, of which only about 5 000 were of an international standard. This figure has improved with the construction of new hotels and lodges, and also due to the refurbishment and upgrading of the hospitality infrastructure.

Business hotel industry in select East and West African countries

Dar es Salaam has three 5-star hotels, namely the Kilimanjaro, the Movenpick and the Golden Tulip Hotel. Arusha, in turn, has four 5-star hotels situated less than 5km from the city centre. Average rates range from USD 170 to USD 350. There are seven popular 4-star hotels in Dar es Salaam and two in Arusha. The average rate per night for these hotels ranges from USD 86 to USD 280. Other popular hotels in Tanzania are listed in the table below. According to TripAdvisor, Mtwara has one popular hotel, The Old Boma at Mikindani, with rates between USD 83 and USD 149. International hotel brands in Tanzania include Serena, Golden Tulip, Hilton, Movenpick, Southern Sun, Protea, and Holiday Inn, amongst others.

Popular hotels in Tanzanian cities by star grade DAR es SALAAM 5-Star 4-Star 3-Star 2-Star 1-Star Golden Tulip Hotel Best Western Coral Beach Harbour View Suites Starlight Hotel Blue Pearl Hotel Kilimanjaro Hotel Colossium Holiday Inn Safari Inn Movenpick Royal Palm Hilton Doubletree Hotel Sea Cliff Sea Cliff Court New Africa Hotel Peacock Millennium Paradise Express Hotel Protea Hotel Courtyard Protea Hotel Oysterbay Royal Mirage Southern Sun ARUSHA 5-Star 4-Star 3-Star 2-Star 1-Star East African Hotels Arusha Crown Hotel Arumeru river Lodge L’Oasis Lodge and Annexe Le Jacaranda Hotel Kirawira Camp Hotel Dik Dik Hotel Arusha Crown Hotel Lemala Manyara Ngurdoto Mountain Lodge Impala Hotel Lemala Tarangire The Arusha Hotel Lake Manyara Serena Safari Lodge Mc-Ellys Hotel Arusha Mount Meru Game Lodge Moivaro Coffee Plantation Lodge Serena Hotel Snow Crest Hotel The African Tulip Source: TripAdvisor and HotelsCombined

Occupancy rates

Hotel occupancy rates were not available at the time of NumberNumber of internationalinternational tourits tourists in hotels in hotels 900 writing. More than 90% of international tourists visiting Tanzania stay in hotels, as illustrated by the accompanying 800 graph. The remaining 10% of foreign tourist arrivals are 700 assumed to be staying with friends and family. 600

500

Identified gaps in the business hotel industry 400

300 Dar es Salaam and Arusha are deemed to have sufficient Number of (000s) tourists accommodation facilities, although several establishments 200 do not meet international standards and, as such, may 100 require refurbishment and/or expansion. 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Mtwara has one hotel of an international standard and a International Tourist Arrivals International Tourists in Hotels Source: Ministry of Natural Resources and Tourism few other accommodation facilities, despite the presence of many business activities related to mining and gas in the region, while the planned Mtwara development corridor is bringing business travellers to the city. Therefore, there may be a need for good, value-for-money 3- or 4-star hotel accommodation in this southern coastal city. It should be noted, however, that other Tanzanian cities not covered in this report may require investments in their hotel industry.

Business hotel industry in select East and West African countries

TOGO

Tourism sector

Tourist arrivals in Togo increased from 58 000 in 2002 to 94 000 in 2006. The decline experienced in 2007 and 2008 triggered interventions by the Togolese government to develop the tourism industry and enhance its contribution to the economy. Governmental actions have included the preparation and International tourist arrivals in Togo implementation of a tourism promotion policy, improving 250 the legal framework for the sector, streamlining management and the privatization of state-owned hotels, as well as the development of tourist attractions. 200

According to the progress report on implementation of 150 the full PRSP, tourist arrivals in Togo rose substantially to 183 000 in 2009, largely spurred by state efforts to improve the tourism industry’s performance. Tourist 100 arrivals increased by a further 25% to 228 000 in 2010. Number of tourist arrivals (000s) 50 However, the lack of a master plan is a major handicap for a sector whose development is lagging when 0 measured against its true potential. Business tourism 2002 2003 2004 2005 2006 2007 2008 2009 2010 statistics were unavailable at the time of writing. Source: African Statistical Year Book (2011) and PRSP Progress report (2010)

Business hubs Lomé, the capital and largest city in Togo, is also the country's administrative and industrial centre, as well as its principal port. Lomé exports coffee, cocoa, copra and palm kernels and also has an oil refinery. Sokodé is the second-largest city in Togo and a commercial centre for the surrounding agricultural areas, whose farmers grow primarily corn, cassava, yams, pepper and beans. The economy of Sokodé is dominated by transport, trade and handicrafts, but there is no industrial activity as such. Kara, in turn, has a busy marketplace receiving tourists, businessmen and political figures through the major Niamtougou International Airport.

Business travel accommodation Togo has a variety of accommodation facilities ranging from 1-star to 5-star hotels in its major cities. Although some of the hotels are not graded, they may be operating in conformance with international standards. Most hotels were lying idle and, therefore, not counted prior to 2009. The overall room and bed capacities nationally Number of rooms in hotels and similar establishments amounted to 30 260 and 45 908, respectively, in 2009. 2002 2003 2004 2005 2006 2007 2008 2009 Number of rooms 4 365 4 480 4 728 4 944 5 201 5 404 5 557 30 260 The steep growth relative to previous years was as a Number of beds n/a 67 20 7 216 7 636 7 803 8 002 8 155 45 908 result of the government privatising its hotels, leading Source: African Statistical yearbook (2011) & Compendium of Tourism Statistics Data (2005 – 2009) the new private owners to refurbish them and putting old hotels back into business.

According to Togo Tourisme, Hotel Palmbeach is the only 5-star hotel in the country, while the Mercure Sarakawa and Sancta Maria are the only 4-star hotels in Lomé. The average rates for 4- and 5- star hotels in Lomé range from USD 160 to USD 249. Lomé and Kara have many popular hotels graded from 3-stars to 1-star, as indicated in the table below. The average room rate per night in these hotels ranges from USD 29 to USD 154. Sokodé has three popular 2-star hotels, namely the Hotel Central, Hotel Aleheri and Hotel Avekedia.

Business hotel industry in select East and West African countries

Popular hotels in selected Togo cities LOMĒ 5-Star 4-Star 3-Star 2-Star Hotel Palmbeach Mercure Sarakawa Hotel Ibis Ambassadors Hotel de I’Aeroport Sancta Maria Hotel Le Sphinx Aristos Hotel de I’Amitie Hotel Paradise Aurore Hotel du Golfe Hotel Pelican Belle-vue Hotel Excellence Cocobeach Hotel le Faso Cote Sud Hotel Solisso Ecole Bijou M’Rode Equateur Melissa Gitotel Espace Beverly Napoleon Grand Hotel de Lomé Relaxe Hotel

KARA

5-Star 4-Star 3-Star 2-Star Hotel Kara Auberge la Douceur Hotel Byo Hotel Concorde Hotel de I’Union Hotel Marie Antoinette Hotel Mira Source: Togo Tourisme and TripAdvisor

Occupancy rates

According to the Compendium of Tourism Statistics Data, Room occupancy rates in Togo 11 occupancy rates in Togo were very low (in fact remained under 11%) throughout the period 2003-09, as illustrated in the accompanying graph. 10.5

Identified gaps in the business hotel industry 10

Togo has no major hotel currently under construction. Percentages 9.5 However, opportunities may exist for the establishment of an upmarket hotel, or for the refurbishment/upgrading of existing facilities, particularly targeting the business travel 9 segment. 8.5 2003 2004 2005 2006 2007 2008 2009

Nevertheless, it is critical that the economic merit of Compendium of Tourism Statistics Data (2005 – 2009) potential hotel upgrading and refurbishment projects, or of establishing entirely new hotel facilities, be determined, especially in light of extremely low room occupancy rates from an historical perspective. It must also be emphasized that the room occupancy rates illustrated in the graph pertain to the period up to 2009 and that tourism arrival figures rose substantially in 2009 and 2010.

Business hotel industry in select East and West African countries

UGANDA

Tourism sector

Tourist arrivals (i.e. residents and non-residents) in Uganda totalled 1 094 000 in 2009, compared to 1 163 000 in 2008. The overall number of foreign tourists visiting the country increased steadily from 468 000 in 2005 to 844 000 in 2008. However, a 5% decline was reported in 2009 to 817 000. Approximately 50% of foreign tourists travelled to the country to visit friends and relatives, business and professional visitors represented about 21% of the total International tourist arrivals in Uganda 900 and 16% travelled for leisure and holiday purposes. 800 Business tourism arrivals rose from 31 000 in 2005 to

700 172 000 in 2009, after experiencing a 62% decline

600 between 2004 and 2005. Tourism’s contribution to foreign exchange earnings increased from USD 165 500 million in 2001 to USD 564 million in 2009, making the 400 sector one of the top foreign exchange earners. 300 200 In 2009, the rest of Africa remained the main source of

Number of Number arrivals (000s) tourist 100 tourists (631 000 arrivals, or 78% of the total), followed

0 by Europe (80 000, 10%), the Americas (56 000, 7%), 2003 2004 2005 2006 2007 2008 2009 Asia (30 000, 4%), the Middle East (8 000, 1%), Oceania Tourists Arrivals Business Tourists Source: Uganda Tourism Board (4 000, 0.5%) and others (5 000, 1%).

Business hubs Kampala is Uganda’s capital and largest city. It is also the country’s commercial centre and the seat of government. Jinja, which is located in eastern Uganda and very close to the source of the Blue Nile, was established in 1907. It is the second-busiest commercial centre in Uganda after Kampala. Entebbe, in turn, is home to Uganda’s principal international airport and also the location of the State House, the official office and residence of the President of Uganda.

Business travel accommodation The Uganda Investment Authority (UIA) has estimated that Uganda has a total of approximately 1 300 registered establishments offering accommodation. These establishments have approximately 20 000 rooms with close to 30 000 beds. The average room rate is estimated at USD 11 per bed per night (for all establishments) and thus the total earned revenue was calculated at USD 15 million for 2009. Of these 1 300 establishments, approximately 600 are located in the tourism-centric districts, with about 80 being used by international tourists and most located in Kampala, Entebbe and Jinja. These establishments have an average room rate of USD 44 and an average occupancy rate of 26%, which is four times higher than the national average room rate and double the national average occupancy rate.

Approximately 90% of all accommodation establishments in Uganda were owned by the private sector in 2006. Just over 68% were owned by domestic private sector players and almost 16% owned by other African (i.e. non-Ugandan) private operators. The low share of foreign non-African hotel ownership, at a mere 5.3% of the total, may be attributed to Uganda being a relatively ‘low-end’ tourist destination. However, of late there have been significant foreign investments in the hotel industry, namely the Serena Hotel, the Green Wilderness Group (Semliki Safari Lodge) and the Emin Pasha Hotel. The Industrial Development Corporation of South Africa (IDC) is investing in the construction of a 5-star Hilton hotel in Kampala, on Nakasero Hill, which will comprise 272 rooms as well as several conference and banqueting venues.

The following table provides a list of hotels in the major tourist destinations in Uganda, namely Kampala, Entebbe and Jinja. The average room rates range from USD 44 to USD 260 per night, although budget hotel rates range from USD 30 to USD 50 per night.

Business hotel industry in select East and West African countries

Popular hotels in selected Ugandan cities KAMPALA 5-Star 4-Star 3-Star Budget Hotels Ungraded

Emin Pasha Hotel Cassia Lodge Fairway Hotel Aminaz Garden Place Green Hills Hotel Golf Course Hotel Grand Imperial Hotel Fang Fang Hotel Buziga Country Resort Ivys Hotel Imperial Royale Hotel Protea Hotel Hotel Africana City Regency Hotel Sunbird Holiday Kampala Serena Speke Resort Munyonyo Hotel Equatoria Diplomat Hotel Sheratin Hotel Hotel Triangle Excellent Hotel Le Bougainviller Faso Hotel Mamba Point Gloria Hotel Ruch Hotel Green Valley Hotel

Shangri La Hotel Holiday Express Speke Hotel Hotel City Square The Lodge Kampala Hotel Havana Tourist Hotel Kampala Regency Kayira Complex Hotel Minister’s Village Hotel Pal Suites Kampala

Sky Hotel Sports View Hotel ENTEBBE 5-Star 4-Star 3-Star Budget Hotels Ungraded Imperial Resort Beach Hotel Imperial Botanical Imperial Golf View Inn Laico Lake Victoria The Lodge Travellers Inn JINJA 5-Star 4-Star 3-Star 2-Star Ungraded Nile Resort Jinja Gately on the Nile Sunset Hotel Bilkon Hotel Hotel Triangle Cool Breeze Hotel Kingfisher Escort Samuka Island Timton Hotel Source: Tripadvisor and Hotelsinuganda.com

Occupancy rates Uganda’s average room occupancy rate in 2009 stood at 30%, while the bed Room and bedBed occupancyOccupancy rates Rates in in Uganda Uganda Room Occupancyoccupancy BedBed Occupancy occupancy rate space utilization was estimated at 25%. The accompanying table indicates that Rate (%(%) ) Rate(% (%) ) room and bed space utilization rates have been below the 50% mark since 2005. 2005 45 33 2006 n/a n/a According to the UIA, the occupancy rate for the standard tourist hotels and 2007 35 33 lodges is highest in Kampala, averaging 45%, compared to 22% for all other focal 2008 30 29 areas. The average occupancy rate is higher for low-end accommodation than for 2009 30 25 higher-end accommodation. Source: MTTI Data for 2006 was not collected

Identified gaps in the business hotel industry

Uganda is presently constrained by a lack of adequate facilities in terms of accommodation and with respect to events and exhibition facilities. The country does not have a single recognized exhibition centre of an international standard. Opportunities for investors thus include the establishment of world-class accommodation and exhibition facilities that can attract major international conferences and events. Furthermore, there are investment opportunities in the mid-range category of accommodation facilities throughout the country, as well as the high-end category in the basic tourism circuits. In eastern Uganda, many business travellers pass through the city of Tororo due to the revived rail network between Uganda and Kenya, and this city also has a major cement works and tea plantations. Consequently, an opportunity may exist for the establishment of business hotel accommodation facilities in Tororo.

Challenges generally facing the business tourism industry

High investment and operating costs: Investment and operating costs are generally very high from a global perspective, largely pushed upward by the traditionally excessive costs of capital equipment and parts, general supplies and other input requirements (including technical/specialised skills), that are, more often than not, imported. This is due to a variety of reasons, including high transport costs, import duties, corruption, insurance costs, logistic delays, equipment damages, deterioration of supplies, inefficient markets, etc.

Shortage of skilled employees, poor service levels: One of the greatest challenges plaguing the hospitality industry in Africa is the shortage of suitably qualified and experienced workers across a wide spectrum of professions. As a result, establishments at the upper end of the industry tend to rely on foreign nationals for the required expertise. Furthermore, the hospitality industry in the region has generally struggled to retain good professionals due to low wage and salary levels. Consequently, service levels tend to be relatively poor in international terms.

Excessive room rates: The abovementioned cost-push factors place upward pressure on room rates, which are also influenced by occupancy rates. The latter, in turn, are affected by seasonal factors, overall business conditions, country image, etc., whilst also being seriously influenced by room rates per se. The practice of excessive pricing of room rates tends to be more pronounced in areas that are characterised by a lack of competition.

Increasing competition: In certain cities, competition is intensifying in the hospitality industry with the arrival of new players (often foreign), new products as well as systems. However, this does not necessarily translate into more competitive room rates being charged and improved service levels being offered, with a dampening effect on demand.

Inadequate physical support infrastructure: Fiscal constraints and public sector inefficiencies continue to impact adversely on the roll- out of physical infrastructure and its continuous maintenance in most African countries. Poor transportation and logistics infrastructure, including national and secondary roads, as well as airports and other entry points, make touring arduous, affecting tourist flows and the overall competitiveness of the hospitality industry. Inadequate energy supply, as well as water and sanitation infrastructure, result in costly disruptions and in precautionary investments by hotel industry players in alternative options.

Air transportation costs and related challenges: From a continental perspective, growth in East and West Africa’s air traffic has been amongst the highest. However, air transport remains expensive by global standards, with landing charges being very high. This is partly due to low traffic volumes on most routes; to the protection of small national carriers as well as inefficiencies in service provision, among others. In general terms, the capacity of existing airport infrastructure is not necessarily problematic, as sufficient runways are in place to handle higher traffic. However, there is room for substantial improvement in flight scheduling, whilst modest investments in parallel taxiways and certain terminal facilities would improve the air travel environment considerably.

Poor image and negative perceptions: The poor image of several countries in this region, which is often associated with factual evidence or perceptions of political instability, safety concerns, the incidence of disease (e.g. malaria), weak public services (e.g. health sector, police, customs officials) affects overall tourism demand and, therefore, the performance of the hospitality industry at large. Within the hospitality industry per se, accommodation establishments are often aged, while many are not adequately branded.

Impact of corruption: Rampant corruption in several countries has a detrimental effect on business operations and financial performance (e.g. unnecessary delays and extra costs being incurred in obtaining the necessary permits or licences, as well as in getting equipment, materials and supplies through ports, etc.). Furthermore, tourism demand is negatively affected by the corrupt behaviour of officials and the hassle factor associated with, for example, the proliferation of roadblocks in many countries; the hindrances created at entry/exit points, etc. Such behaviour has extremely negative repercussions on tourist perceptions, with the bad publicity spreading swiftly in an age of extremely rapid and effective online communication.

Limited investment activity: Despite the substantial potential for further development and amelioration of the hospitality industry in several African countries, domestic and foreign investment activity continuously fail to address the evident gaps for a variety of reasons, largely related to the risk-reward relationship. Operational challenges and financial risks abound, unnecessarily reducing expected returns on capital investments and affecting investor interest and confidence levels.

Economic outlook

Sub-Saharan Africa’s (SSA) gross domestic product expanded by 4.9% in real terms in 2011, or almost equal to the 5% average annual growth recorded in the pre-crisis period from 2000 to 2008. Four East African and two West African economies were amongst the fastest growing within SSA in 2011, namely Ghana (1st), Rwanda (2nd fastest), Ethiopia (4th), Mozambique (5th), Nigeria (6th) and Tanzania (11th).

The region’s economic growth is forecast by the World Bank to accelerate to approximately 5.3% in 2012 and to 5.6% in 2013. Excluding South Africa, which accounts for one-third of the regional GDP and whose slower growth drags the average downward, SSA’s forecast rates of economic expansion would be substantially higher at 6.6% and 6.4% in 2012 and 2013, respectively. The World Bank’s forecasts for economic growth in the individual East and West African countries are provided in the table below.

However, this multilateral institution cautions that Africa: economic growth projections substantial downside risks abound, largely associated Real GDP growth (%) with the possibility of a considerable slowdown in the Country 2011 (estimate) 2012 (forecast) 2013 (forecast) global economy if the financial crisis in Europe is Burundi 4.4 4.7 4.9 aggravated and its impact is spread throughout the CoteCôte d’Ivoire -5.8 4.9 5.5 world. Ethiopia 7.7 7.2 7.8 Ghana 13.6 9 8 Such an eventuality could result in sharp declines in Kenya 4.3 5 5.5 Africa’s commodity exports and the respective Malawi 5.6 5 5.6 international prices, in a contraction of tourism inflows Mozambique 7.4 7.6 8.5 and earnings, as well as in reduced migrant workers’ Nigeria 7 7.1 7.4 remittances, all of which would impose further fiscal Rwanda 8.8 7.6 7 constraints and affect individual governments’ ability Sudan 5.3 5.8 5.8 to roll out and maintain physical support infrastructure, Tanzania 6.4 6.7 6.9 among others. Togo 3.7 4 4.1 Uganda 6.3 6.2 7

Source: World Bank (Global Economic Prospects, January 2012)

Note: Estimates and forecasts were not provided for Somalia.

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