Security, geographical misconceptions and infrastructure named as some of the factors
A recent report by STR Global, a hospitality research firm has revealed a number of factors that could be influencing the pricing of hotels across various African capitals. The report majorly noted that despite having some of the continent’s recognized chains as well as renowned global brands; the hotel rate in the Kenyan capital, Nairobi is almost double that of the more advanced South African capital – Johannesburg.
The report released ahead of the Africa Hotel Investment Forum (AHIF) scheduled to take place by the end of this month notes that in contrast to other major African capitals, such as Lagos, Cairo and Cape Town, Nairobi’s hotel rates have remained fairly stable in the past year despite the low occupancy rates due to the rampant security threats and travel advisories. The industry also suffered greatly due to misconceptions during the Ebola outbreak in West Africa.
Among other factors, infrastructure, ease of transport (airways) and political stability have played a key role in formulating hotel pricing. For instance, Ethiopian capital –Addis Ababa is still grappling with a shortage of quality hotels leading to high rates in the non-competitive market. However, hosting the African Union (AU) headquarters has played a great role in pushing its stand on the Meetings and Conference frontier as well as endorsing the country’s position both on the regional and global tourism scale.
As Estelle Verdier, Managing Director for Jovago East & Southern Africa notes, ‘we are moving away from the traditional aspects of tourism to new frontiers such as Meetings, Conferencing and Incentives, Sports and Adventure. It’s important for destinations to invest in the right structure that will support their unique product.’
Ethiopia’s economy is reported to be growing at a rapid rate of more than 10% pa through the last decade, which automatically places it as an attractive field for investors in the sector.
According to the report, travelers can have a good night’s sleep in a Nairobi Hotel for about $122.30 – almost half the price in Addis Ababa whose rates are marked up to $231.78. Egypt, which ranks top in the most visited countries in Africa has favorable pricing at only $72.90 followed by Cape Town at an average $105.73.
Kenya has been on an intensive marketing campaign for the country’s tourism sector with the latest efforts seen through newly launched collaboration between the Kenya Tourism Board (KTB) and the national carrier, Kenya Airways. The country has also received great endorsement through hosting highly regarded and globally recognized conferences such as the Global Entrepreneurial Summit, World Trade Ministerial Conference and upcoming Africa Travel Association.