The Big 5 dominate African pipeline

New data from Lagos, Nigeria-based W Hospitality Group reveals chain development is dominated by “The Big 5” with Accor, Hilton, IHG Hotels & Resorts, Marriott International and Radisson Hotel Group accounting for 66% of hotels and 71% of rooms being planned and built across the African continent.

The survey, in association with the Africa Hospitality Investment Forum (AHIF), is based on responses from 47 global and regional (African) hotel chains, reporting on a pipeline of hotel development activity totaling around 92,000 rooms in 524 hotels in 41 of Africa’s 54 countries.

Significant trends to emerge in the past year include strong growth, over 9%, in both North and sub-Saharan Africa, an increase in very large hotels (the average size of the largest 10 hotels is 770 rooms, up from 723 rooms in 2023) and a rapid growth in resorts, up by 32% from 2023. In this respect, Zanzibar has performed particularly well with a pipeline that has grown from seven resorts with 983 rooms in 2023 to 14 resorts and 2,048 rooms in 2024.

Egypt continues to dominate the African hotel development pipeline with almost 26,250 rooms in 109 hotels. Pipeline growth of 19 hotels (5,200 rooms) in 2023 is larger than the next four countries put together. It has well over three times the number of rooms as second-placed Nigeria, which has 7,622 rooms in 50 hotels. Third-placed Morocco has 7,169 rooms in 52 hotels and Ethiopia, in fourth place, has 5,128 rooms spread across 31 properties.

There has been an extremely strong increase in the number of resort projects in the pipeline, growing from 24% of the total in 2023 to 30% in 2024. In addition, around half of the rooms in hotels and resorts that opened last year were in resorts. Both Boa Vista (Cape Verde) and Sharm El Sheikh (Egypt) score highly because of the large average size of the resorts there. The largest hotel in the pipeline is a Rixos resort being planned in Sharm El Sheikh with over 1,800 rooms.

Accor, Marriott vie for prominence

Marriott International has more rooms under development than any hotel company with almost twice the number of pipeline hotels and rooms as second placed Hilton, and it has the largest number of rooms added in the year.

Looking back at previous years, there used to be a neck and neck race between Accor and Marriott International but, for the second year running, Accor’s pipeline has actually decreased, from a high of about 20,250 rooms in 2022 to 13,375 rooms today, according to W Hospitality data, which added that Accor leadership said it is focused on a “clean and achievable pipeline, rather than numbers for numbers sake.”

W Hospitality said that Accor’s quote highlights a key issue in tracking hotel development in Africa, which is differentiating between hotel projects that are proposed from those that are under construction and from those that have been completed. Typically, the length of time between signing and opening is between four and five years. However, the report identifies 35 projects in the pipeline that are 10 or more years old, including one hotel that was signed 16 years ago.

When it comes to hotels under construction, Marriott International leads the way, with 138 hotels (15,011 rooms) currently being built. It is followed by Hilton (72 hotels, 5,955 rooms), Radisson Hotel Group (35 hotels, 5,748 rooms) and Accor (70 hotels, 3,346 rooms). TUI Hotels & Resorts is fifth in the ranking with 12 hotels (2,208 rooms) under construction.

Of the total 29 chain hotels and resorts that opened in Africa in 2023, the split was 10 in North Africa and 19 in sub-Saharan Africa. Of those 19 openings, 11 were in East Africa, including six new hotels and resorts in Tanzania, which had the most openings of any African country. W Hospitality said it is clear evidence of the attractiveness of both the mainland and Zanzibar to investors and operators.

Accor topped the list for openings last year, and it also tops the number of hotels and rooms opened over the past five years (2019-2023) with 34 hotels opening, comprising around 5,500 rooms.

In terms of “actualization,” W Hospitality said 2023 was an exceptionally slow year. However, it added that it is likely to be offset by a strong 2024, during which the top 10 chains expect to open 139 hotels with 19,122 rooms.

“Our report contains very positive data, with the pipeline expanding by more than 9% in 2023,” said Trevor Ward, managing director, W Hospitality Group. “This is the largest increase since 2018 and, according to data produced by CoStar/STR, is one of the highest increases globally, surpassed only by the Americas.”

W Hospitality said it is looking forward to some 139 hotels and resorts opening in Africa in 2024, with expectations of a far greater actualization rate than in recent years.

When considering existing hotels, as well as hotels in the development pipeline, the continent’s current king of the jungle is Accor, with 165 hotels, containing 29,041 rooms, open and trading. Marriott International is second with 25,451 rooms in 143 hotels; Hilton is third with 12,525 rooms in 47 hotels; and Radisson Hotel Group is close behind with 12,179 rooms in 61 properties. However, W Hospitality stated that if Marriott International delivers all the rooms in its pipeline, it is on course to overtake Accor and become pack leader with 51,816 rooms in operation.