The African hospitality industry has undergone tremendous changes and disruptions over the last two decades, many due to factors such as economic and political uncertainty, currency or oil price fluctuations, and safety and security concerns.
However, other key global trends have also steadily reshaped the industry and impacted on the African business traveller. As we near the end of 2019, here are some trends that are likely to transform the industry well into the future.
It’s no surprise that the future of the African hospitality industry will be increasingly powered by digital technology. Mobile will continue to influence the industry, along with other disruptive technologies that hotel brands will be driven to incorporate into guest offerings.
Digitised experiences and apps are increasing ways in which hoteliers manage the services they provide to their customers, and will continue to help control many aspects of the guest cycle and experience and address issues in more efficient, proactive ways.
Greater mobile penetration and easy-to-use-and-navigate online experiences will also mean that African travellers, and millennials, will increasingly communicate with brands through social media.
With ever-increasing smartphone adoption in Africa, social networks such as TripAdvisor will continue to have a profound impact on travellers. The continued growth of social media – with 191 million active social media users across the continent (172 million of whom access social media through their mobile) – has meant that peer reviews and online referrals also carry more weight than traditional advertising; peer-written content is also millennials’ most trusted source of information.
Whilst the sharing economy is set to experience further growth in the future, it is unlikely to destabilise traditional hotels or ever completely take over the hospitality industry. The corporate hospitality segment provides a more extensive list of services and facilities better suited to, and more recognised by, short-term travellers.
Despite the disruptions caused by the shared economy, the African hotel sector is enjoying a period of sustained growth. Average daily rate (ADR), occupancy, and revenue per available room (RevPAR) are showing strength. Furthermore, the hotel market share of advanced reservations has grown year on year. There will be room for players in the shared economy and hotels into the future. However, a good lesson to be learnt from the sharing economy is how to use distribution channels to increase bookings and occupancy.
Online Travel Agents (OTAs)
In the past 20 years the emergence of online travel agencies as distribution partners has had a profound effect on the hotel industry. That relationship continues to grow and change.
Over the years, the OTA sector has expanded, consolidated and changed some of its strategies. Other intermediaries and disruptors such as Google, Facebook, TripAdvisor, metasearch sites and Airbnb have further complicated the hotel industry distribution landscape.
Whilst there certainly are real pluses and real minuses to the OTAs, I do believe the pluses outweigh the minuses. For one, they have a tremendous grasp of what’s coming down the pipe in terms of social media marketing, channel management and use of the internet, understanding this space sometimes better than any hotelier does.
Responsive, resilient business models
Tourism is bound to become riskier and more prone to crises as the number of global travellers steadily continues to grow. This will be accompanied by increased regulation as a response to a disproportional increase in tourist flows in many places.
The performance of hotel companies is strongly dependent on the conditions and the macroeconomic environment into which they’re inserted. Thus, the state of the economy will affect the performance of hotel organisations, and these companies will have to organise themselves in function of market dynamics far beyond the national context, strategically prepared for the constant changes that come from an increasingly globalised context.
Travellers, and millennial business travellers in particular, request extreme personalisation, unique experiences, and so on. By 2022, the experiential market is estimated to account for nearly two thirds of the global luxury hotel market. The rise of experiential travel is a drive for hoteliers to reconstruct and develop their product offering to be more engaged and personalised, immersive and adventurous, and more adjusted to local culture.
Sustainability will continue to be an ever-growing key factor in successful brand management. Hotels will need to advance their sustainability missions to fuel their corporate social responsibility efforts and establish trust.
Green campaigns that hotels will consider are global carbon emission compliance, waste reduction, reducing plastic usage, and saving water. Smart buildings that will digitise hotel facilities will also result in lower energy costs.
One thing is sure, the African hotel industry will need to continue to evolve and reinvent itself in order to exploit the opportunities and cope with the challenges it faces. The only question remaining is to what extent this transformation will have to take place.