Wednesday, 17 June 2020

African hotel development had returned to growth at the start of 2020, with more than 78,000 rooms in 408 hotels in the pipeline, according to the 12th annual survey by W Hospitality Group, acknowledged as the industry’s most authoritative source. However, the COVID-19 outbreak is now shattering the dreams of Africa’s hotel industry.

W Hospitality Group’s Managing Director, Trevor Ward, said: “The growth of the chains’ presence in Africa has been a very positive story since we started this analysis in 2009. It is quite clear from the numbers that the chains, the developers, the investors – and all of us at W Hospitality Group! – continue to believe in the opportunities that Africa presents in the hotel and tourism industry. However, our industry has been devastated by the impact of COVID-19, possibly more so than most other economic sectors, mainly because of the almost total shutdown of borders and of the aviation sector – no flights means no guests.”

“With that background, we see a slowdown in pipeline growth in 2020, as we all get to grips with the new reality. With so many of the players locked down, fewer deals will be signed, and it is inevitable that some of the planned openings in 2020 will be delayed, due to closed or slower-paced construction sites, restrictions on funding and a lack of market demand. According to our latest data, there are 90 hotels with 17,000 rooms scheduled to open in 2020, but we estimate that at least half of these will be delayed, bringing the actualisation rate down to no more than 40%.”

This year’s African Hotel Chain Development Pipeline survey covers 35 international and regional hotel contributors across the 54 countries in north and sub-Saharan Africa, and in the Indian Ocean islands. It reveals a 3.6% increase on the 2019 pipeline. Most encouraging was a record 68 chain hotels opening last year, fully 75% of those which were scheduled to open, with 11,000 rooms. That performance was substantially up from the 39% of those scheduled to open in 2018 actually doing so. Accor performed particularly well; it opened 18 hotels last year with almost 3,500 rooms in its various brands, ranging from Ibis to Fairmont.

The findings of the 2020 Pipeline report, together with a mid-year update, will be discussed in depth at Bench Events’ new virtual conference, to be held on 21st July. This event is complementary to the Africa Hotel Investment Forum (AHIF), the leading hospitality investment conference in Africa, which has in previous years connected business leaders to serious investors, driving funds into tourism projects, infrastructure and hotel development across the continent.

Marriott, the world’s largest hotel chain, has the largest pipeline in Africa, 22 per cent more hotels and 6 per cent more rooms than second-placed Accor, but Accor has been catching up fast, signing 25 new deals last year, compared to Marriott’s 17 new projects.

Hotel Chain Development Pipelines in Africa 2020

Top 10 Chains by Number of Planned Rooms

   

Hotels

Rooms

Change on 2019

Average Size

 

1

Marriott International

90

17,902

5.9%

199

 

2

Accor

74

16,868

24.6%

228

 

3

Hilton Hotels & Resorts

53

10,093

-10.0%

190

 

4

Radisson Hotel Group

38

7,385

-17.7%

194

 

5

InterContinental Hotel Group

13

2,642

38.8%

203

 

6

Barceló Hotels & Resorts

8

2,488

-

311

 

7

Meliá Hotels & Resorts

6

1,954

-15.7%

326

 

8

Hyatt International

11

1,859

23.4%

169

 

9

Mangalis Hotel Group

13

1,522

-14.5%

117

 

10

Deutsche Hospitality

4

1,503

32.0%

376

 

If Accor can open its hotels in 2020 at the same rate that it did in 2019, it is likely the company will overtake Marriott and position itself as the largest operator in Africa. 

Table 9: Hotel Chain Development Pipelines in Africa 2020

Top 10 Chains: Pipeline vs Existing Hotels in Africa

   

Pipeline

Existing

Pipeline vs Existing (Rooms)

   

Hotels

Rooms

Hotels

Rooms

 

1

Marriott International

90

17,902

139

24,567

73%

2

Accor

74

16,868

155

25,688

66%

3

Hilton Hotels & Resorts

53

10,093

48

13,344

76%

4

Radisson Hotel Group

38

7,385

41

8,254

89%

5

InterContinental Hotels Group

13

2,642

27

6,329

42%

6

Barceló Hotels & Resorts

8

2,488

14

3,203

78%

7

Meliá Hotels & Resorts

6

1,954

12

3,084

63%

8

Hyatt International

11

1,859

8

1,838

101%

9

Mangalis Hotel Group

13

1,522

4

572

266%

10

Deutsche Hospitality

4

1,503

15

4,888

31%

TOTAL

 

310

64,216

463

91,767

70%

 

Trevor Ward said: “We have to wait and see what will happen in the second half of 2020, and in 2021, as we emerge from lockdown and other restrictions. Tourism is such an important industry in Africa, because of the direct and indirect jobs that it creates and sustains, as well as its strong foreign currency earnings. We are anxious to see hotels reopen and get back to contributing to the African growth story.”

Matthew Weihs, Managing Director of Bench Events, which is staging Africa Tomorrow, said: “Right now, we are facing the biggest recession in history. For those seeking to operate hotels, it is a dreadful time. However, for the savvy investors, this is actually a moment of opportunity because hotels are a long-term investment and one of the secrets of success is to spend money during the bottom of the economic cycle in order to capitalise on the upturn as soon as it comes. That’s one reason why I expect the networking sessions at Africa Tomorrow will be very busy and fruitful.”

Published in Travel & Tourism

Botswana on Monday lifted a recently reinstated coronavirus lockdown on its capital city Gaborone and surrounding areas after most of the cases reported last week turned out to be negative, the health department said.

Botswana ended a 48-day national lock down on May 21, allowing businesses and schools to reopen, but reinstated strict control on movement in the greater Gaborone region on Friday after health officials reported eight new coronavirus cases at one hospital.

But on Monday health officials said national government had retested the patients and the results had come back negative.

“We ended up having a total of 16 new suspected local cases on Friday but from those, 10 have been confirmed to be negative whilst the results on the six remaining are still pending,” director of health services Malaki Tshipayagae said in a televised announcement.

“As a result the lockdown on the greater Gaborone region will be lifted at midnight today”, said the official.

Botswana has reported a total of 48 confirmed infections, one death and 24 recoveries.

 

Reuters

Published in Economy

Nigeria will find it impossible to place taxes on the transactions of foreign tech companies like Netflix, Facebook, Google, Youtube and other virtual firms without foreign help, Head of Research at SBM Intelligence, Ikemesit Effiong, has said.

It will be recalled that the federal government announced its intent to tax OTT’s in the Finance act the president signed earlier in the year.

The legal document, which reviewed the countries tax policies, included any business that “transmits, emits, or receives signals, sounds messages, images or data of any kind by cable, radio, electromagnetic systems or any other electronic or wireless apparatus to Nigeria in respect of any activity including electronic commerce, application store, high-frequency trading, electronic storage, online adverts, participative network platform, online payments and so on, to the extent that the company has a significant economic presence in Nigeria and profit can be attributable to such activity.”

Effiong told SaharaReporters that it would be difficult for the federal government to calculate the Nigerian derived earnings of these companies’ activities.

He is sceptical about how the government will, for example, find out the volume of activities engaged in by Nigeria’s estimated 20m Facebook users and how much each transaction yielded in revenue.

He said countries across the world were discussing how to tax over the top technologies (OTT’s) and virtual firms that do not have end-user telecommunication infrastructure and share the profit.

“The only way I see Nigeria being able to negotiate a tax regime (OTT) will be for them to collaborate with our European and American partners,” he said.

“I can’t think of any African economy – South Africa included– that can do this on their own. Even global powers like the US and the EU are struggling with this.”

The minister for finance, Zainab Ahmed, gave clarity on how the government plans to implement the new tax regime by issuing the Companies Income Tax (Significant Economic Presence) Order. The finance minister is also empowered by the law to determine who a SEP is.

In the letter of the order, the first guiding principle in identifying who a SEP is will be to check if the company has sustained interaction with customers in Nigeria or agents of foreign entities based in Nigeria and have an annual earning in any currency whose value comes up to N25m or more.

Firms that fall into this category have been asked by the order to customize their platforms to enable them to receive payment in naira for taxable reasons.

“A foreign entity providing technical services such as training, advertising, supply of personnel, professional, management or consultancy services shall have a SEP in Nigeria in any accounting year if it earns any income or receives any payment from a person resident in Nigeria or a fixed base or agent of a foreign entity in Nigeria,” the act reads.

Education service providers are exempted though. Companies like Facebook, Twitter and Google, that make as much money off traffic as they do from promoted posts, would be difficult to tax, experts believe.

Most of these OTT firms do not have offices in Nigeria. Those who do only maintain a representational presence and Effiong thinks this is the flaw in the plan.

“If Facebook says we had 17m unique visits, how are you as a country going to quantify and verify it?” he wondered.

Explaining that every taxpaying entity in the country has to open their books to the federal or state revenue boards, Effiong said OTTs have to largely comply, they have to be transparent about the number of Nigerian users they have, the ads those users clicked on, what the monetary cost of those ads was… for tax authorities to be able to assess them.”

Save for a Chinese/Iranian/Russian mode of internet monitoring, the lawyer said it would be impossible for the government to validate the genuineness of the data it is given.

Kenya is another African country that has attempted to levy an OTT. Its revenue authority said in a recent draft regulation that foreign companies offering digital services should register in the country to pay value-added tax or get a tax representative.

Outside Africa, France has been the most desperate to begin charging virtual firms for the number of undeclared profits they earn across the world.

In January, Macron’s government said it was going to go ahead of the EU conversation on the matter to collect three per cent of the global annual earnings of these firms.

That move was swiftly countered by the Trump administration, who threatened to massively heighten excise duties on goods coming out of France. Since then, Coronavirus has stalled the possibility of a joint tax regime for over-the-top technologies in the European Union.

Nigeria and Kenya are chasing the monies that could come from this new pull of cash though. It could be vital funding that would ease the recession fears in Africa’s largest economy.

 

SOURCE: SAHARAREPORTERS

 

 

 

Published in Telecoms
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