JOHANNESBURG—Africa’s tourism sector has cratered in the face of the coronavirus, but the world’s biggest hotel chains remain committed to the continent.
Major hotel chains, from Marriott International to Radisson Hotel Group and Paris-based Accor , Europe’s largest hotel company, say their African businesses are not only holding up, they are determined to stay on track with, if not grow, their footprints. The companies see sub-Saharan Africa as underserved and underdeveloped in terms of hotels and predict that demand for both business and leisure travel will grow once the pandemic abates.
“I haven’t heard of anybody that says we aren’t interested in Africa anymore,” said Trevor Ward, owner of W Hospitality Group, a Lagos, Nigeria-based advisory firm that works across Africa. “The long-term play is fine.”
Travel restrictions and social-distancing have kept long-haul business and leisure travelers at home, choking a crucial source of revenue for the region. The World Travel and Tourism Council estimates that in a baseline scenario, Africa will lose 10.9 million, or 44%, of its tourism-sector jobs and $75 billion, or 45%, of its tourism income this year. On a percentage basis, that decline is worse than the Asia-Pacific region and the Americas, though not as bad as Europe.
The collapse of many independent hotels due to Covid-19 has heralded a new phase of consolidation in the lodging industry, where big chains are taking over and rebranding distressed properties, leading to faster expansion across Africa, hotel chains and analysts say. That is partly because hotel chains bear little risk or cost when they convert an independent property to their brand, at least compared with building a new property; the converted hotel becomes part of the chain, which collects franchise fees from the hotel’s revenue.