Hotels Outlook: 2018-2022

8th Annual edition: Positioning for future growth

The Outlook provides an overview of how the hotel industry in South Africa, Nigeria, Mauritius, Kenya and Tanzania is expected to develop over the coming years. It details the key trends observed and discusses the challenges facing the sector, as well as considering its future prospects.

PwC’s eighth edition of the Hotels outlook: 2018-2022 looks at hotel accommodation in South Africa, Nigeria, Mauritius, Kenya and Tanzania. According to the report, hotel room revenue in Mauritius increased by 12.7% in 2017, and the country continues to experience growth in the number of foreign visitors. Following annual increases of 10.8% in 2015 and 2016, tourist arrivals rose an additional 5.2% in 2017. Faster global GDP growth paired with additional flights to Mauritius are the main factors that have contributed to this increase. Room revenue for five-star hotels increased 16.4% in 2017, while three- and four-star hotels grew by 11.9%.

The Tourism industry is doing well and the prospects are positive. Air access remains the biggest concern of operators. With the arrival of KLM and more airlines in the pipeline, the forecasted growth should be sustained. The sector continues to face a number of challenges such as security, inflation and compliance with EU GDPR. Our hoteliers will need to be proactive and innovative to grow sustainably.

Olivier Rey, Hospitality Industry Leader, PwC Mauritius

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Hotel accommodation

In recent years Mauritius has had the strongest hotel market of the countries covered in this report, with a 12.7% increase in room revenue in 2017 and 38% cumulative growth since 2014. Mauritius has had a strong, steady economy and relatively low inflation and remains a popular tourist destination.

Since 2014, the number of tourists arriving in Mauritius has increased by more than 300 000, a 29% gain. The average length of stay, at the date of publication of this report, was 10.9 nights (2017, 10.8 nights). Gross revenues for 2017 reached EUR1.4bn. There were 114 hotels, with a capacity of 29 656 bed places

The recent success of the Mauritian tourism and hotel market in part reflects a strong local economy – real GDP recorded an annual expansion of 3.8% during the past two years

Contributing to employment of Mauritius

According to the ‘Three-year Strategic Plan 2018–21 – Adapting to the changing Global Environment’ published by the Government of Mauritius, in 2017 the tourism sector contributed 8% to GDP while providing 10% of active employment in the country and attracting 8% of investments.

 

Where are visitors coming from?

Europe continues to be our main source of arrivals with an overall increase of 6.2%. France remains at the top of the list with 58% of arrivals. With the introduction of KLM flights from the Amsterdam hub, Netherlands recorded the largest increase with a 31.6% rise fuelling arrivals from neighbouring countries such as Scandinavia, Czech Republic, Russia, Germany, Italy, Poland and Switzerland.

The Americas marked the sharpest increase in arrivals with a rise of 25.4% led by Brazil and double digit growth from the USA and Canada.

Arrivals from Africa, which accounts for 22.5%, showed a modest growth of 3.4% only whilst the Asia Pacific region recorded the smallest growth with 2.6%.

 

Security and data protection; burning challenges for hotels

Hotels are in the spotlight on privacy and security enforcement, and the new General Data Protection Regulations (GDPR) required a programmatic approach to data privacy. A number of large mauritian hotel groups have started their compliance journey with regards to the GDPR requirements and the recently updated Data Protection laws, making substantial investments to achieve compliance in a sustainable and demonstrable manner.

Discover more about GDPR and how we can help you here

 

Five-star hotels performing well

Room revenue for five-star hotels increased 16.4% in 2017, buoyed by an 8.3% rise in guest nights and a 7.5% increase in ADR. The increase in overall guest nights in 2017 was largely concentrated among five-star hotels.

We expect five-star hotels to continue to outperform the overall market in the coming years. Guest nights will remain steady in 2018 even as the total market declines, and we look for increases in 2020–21 as ADR growth moderates. For the forecast period as a whole, we expect guest nights to increase at a 2.9% compound annual rate.

Room revenue for Five-star hotels increased 16.4% in 2017

What's our role in this report?

Every day, PwC plays a significant supporting role in hospitality businesses across the world. With our local knowledge of culture, laws and business needs, we help clients make the most of changing market scenarios and assist them to deliver on special projects and their organisational growth aspirations.

Olivier Rey
Hospitality Industry Leader, PwC Mauritius

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