The growing need for local partners in the Tourism & Hospitality industry
Today, the market for tourism and hospitality in East Africa remains attractive to investors and customers. This is also the wider sentiment across Sub-Saharan Africa where the pipeline for hotel development remains considerably larger than that of North Africa. According to data from the W Hospitality Group in their latest survey in 2016, the hotel pipeline in Sub-Saharan Africa has increased by 42.1% year on year. Sunbird has had multiple discussions with many of the leading hoteliers to act as a local partner to rollout their pipeline across Eastern and Southern Africa.
African Hotel Pipelines
The number of hotels in the pipeline in North Africa stood at 87 (19,971 rooms), while the number of new hotels in the pipeline in Sub-Saharan Africa is 278 (44,260 rooms), of which approximately 60% are under construction.
In Sub-Saharan Africa, this is a 45.6% increase in the number of hotels and a 42.1% in the number of rooms since 2015. As an example, AccorHotels are placing a priority on fast growing markets and have particularly focused on Eastern and Southern Africa.
Source: W Hospitality Group - "Hotel Chain Development Pipelines in Africa 2016."
At Sunbird, we believe in adding value to large hotel development projects by partnering with companies to succeed in an underperforming, erratically managed and poorly serviced hotel market. We are working a number of hotel and leisure companies to set up a portfolio of hotels that cater to the growing purchasing power of a burgeoning middle class in East Africa, rising business growth and professionalisation of the services industry. We already have one live project building a five-star hotel resort in Zanzibar with other major hotel development projects in the pipeline.
New Hotel Chains in Tanzania in 2020
Tanzania already has a number of major international hotel chains including Wyndham, Hilton and Hyatt, with major chains including Rotana, Starwood and Royal Orchid opening new developments by 2020.
According to JLL, the number of branded hotels under supply in Dar es Salaam is expected to exceed 68% by 2020. The growth outlook for new major mid to upper scale hotel developments looks positive with good current occupancy in the Dar es Salaam hotel market, and there is plenty of potential for further growth.
Source: JLL - "Dar es Salaam: Hotel Market Outlook - April 2006."
At Sunbird, we believe that as a developer, we have similar goals to the large number of hotel and leisure companies that are looking to rollout their pipelines in the future. We believe that by partnering with other developers that have complimentary capabilities, we can deliver a number of bespoke build-to-suit hotels that are end-client driven. Our development process would include deal origination and feasibility through to financing, construction and long term property and facilities management.