PwC: Opportunities abound for foreign investment in Africa’s hospitality sector
The hospitality sector in Africa’s emerging markets looks set to profit from foreign investment and an influx of foreign travellers, according to PwC’s 7th edition of the ‘Hotels Outlook: 2017-2021’ report.
Emerging markets are set to post faster growth in revenue than their counterparts in developed countries, making them integral to the expansion strategies of some of the world’s leading hotel developers.
The tourism industry continues to be one of the fastest-growing and most vibrant sectors of Africa’s economy.
In spite of recent challenges, including the fall in oil prices, change in visa regulations in South Africa and contraction of the global economy, the sector has significant potential to create jobs, uplift inclusive economic growth across the continent, and reduce poverty.
Pietro Calicchio, the Hospitality and Gaming Industry Leader for PwC Southern Africa, said the growth potential of Africa is high mainly “because of the rapid economic growth in some economies, a growing middle-class and an increase in visits from foreign visitors.
“The emerging markets are a sought-after destination for foreign investors – it is in these markets where there are continued economic growth and a need for additional infrastructure.
“In addition, governments and policy makers are introducing a range of tax incentives and other incentive schemes to foreign investors.”
Ghana is one of the major emerging markets in the African hospitality sector.
The industry grew 1.2% from 2015 to 2016 and the World Travel & Tourism Council (WTTC) projected Ghana's tourism industry to expand by 5.6% in 2016 and to maintain an annual growth rate of 5.1% per annum from 2017 through to 2027.
A number of internationally-branded hotels are based in Accra. As of May 2017, there were 2,723 hotels and lodges in Ghana.
There is expected to be an increase in the number of business travellers to the country as the government embarks on a number of initiatives to stimulate economic growth.
The government is also making improvements in transport infrastructure, with the construction of a third terminal at Accra’s Kotoka International Airport and allocation of funds for the repair of roads to popular tourist destinations.
The hotel industry is expected to grow 1.1% in 2017, 2.1% in 2018 and 2.3% in 2019.
In the east, Ethiopia is set to boost investment in the hospitality sector in order to generate more foreign earnings.
Total tourist arrivals in Ethiopia from 2015 to 2016 increased from 817,860 to 868,780. Tourist arrivals in 2017 are forecast to increase by 5.7% on the previous year to 918,010.
Government plans include expanding Ethiopian Airlines’ footprint of regional and international routes and Addis Ababa international airport is also undergoing expansion that will enable it to service 20mn passengers a year by 2019.
In more traditional tourist markets, overall room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 12.2% in 2016, the biggest increase since 2013.
Mauritius and South Africa had the largest gains at 15.3% and 12.2%, respectively, each benefiting from double-digit growth in foreign overnight visitors.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.