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Africa’s hospitality sector withstands economic headwinds.

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SOUTH AFRICA’s hospitality sector is poised for further growth in the next five years bolstered by inbound travelers amid a difficult and volatile economic climate.

Pietro Calicchio, Hospitality & Gaming Industry Leader for PwC Southern Africa says: “Africa’s hotel sector has remained resilient in the face of strong economic headwinds.”

PwC’s 7th edition of the ‘Hotels Outlook: 2017-2021’ projects that South African hotel room revenue will grow by 10.1% in 2017 to R17.5 billion. Overall hotel room revenue for South Africa is expected to expand at a 9.3% compound annual rate to R24.8 billion in 2021 from R15.9 billion in 2016.

PwC’s report features information about hotel accommodation in South Africa, Nigeria, Mauritius, Kenya and Tanzania. This year we take our African view a step further, with looking into Ghana and Ethiopia as emerging hotel markets.

The outlook for 2017 is positive with an increase in the number of international visitors to South Africa expected. Domestic tourism is also anticipated to increase by 2.2% in 2017.

“One of the positive outcomes for the hotel market in South Africa was the amendment of visa requirements that required foreign visitors from certain countries to provide biometric data in person. International visitor numbers to South Africa rebounded significantly in 2016 with a 12.8% increase as compared to the 6.8% decrease in 2015,” Calicchio comments.

Visits from China and India increased in 2016 as a result of the relaxation in the visa requirements; travellers from China to South Africa increased by 38% and India recorded a 21.7% increase. Of non-African countries, the UK is still the largest source of visitors to South Africa at 447 840 in 2016.

Of the African countries, the largest number of foreign visitors to South Africa in 2016 came from Zimbabwe at two million, followed by Lesotho at 1.8 million and Mozambique at 1.3 million. In addition, visits from East and Central Africa also rose by 11.2% in 2016.

It is promising to note a growing number of new hotels planned for the South African market over the next five years. The overall number of available rooms is expected to increase at a 0.9% compound annual rate, thereby adding 2700 rooms over this period.

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Nigeria is expected to be the fastest-growing market from a revenue perspective over the next five years with a projected 14.7% compound annual increase in revenue, benefitting from an improving economy, continued growth in domestic tourism, and expansion in the number of available rooms. South Africa is projected to be the next-fastest growing market with a 9.3% compound annual increase in room revenue, most of which will be generated by rising average room rates and continued but moderating growth in tourism.

The emergence of peer-to-peer inventory from entities such as Airbnb, has bolstered growth in non-hotel accommodation. Ongoing growth in the peer-to-peer sector over the next few years will make the market more competitive, which may limit room-rate growth for hotels.

The revenue for the five markets as a group is forecast to rise at an 8.7% compound annual rate to R59.2 billion in 2021 from R39 billion in 2016.

“Nigeria is expected to be the fastest-growing market from a revenue perspective over the next five years with a projected 14.7% compound annual increase in revenue”

Hotel accommodation: South Africa – Nigeria – Mauritius – Kenya – Tanzania

Overall, room revenue in South Africa rose 12.2% to R15.8 billion in 2016, the biggest increase since 2013. Over the past five years, the occupancy rate has risen, surpassing the 60% level and reaching 61.2% in 2016. This gain has stimulated interest and a number of new hotels are expected to open in the next five years.

Five-star hotels have had the highest occupancy rates in the market at 79.3% in 2016. Room revenue for five-star hotels is expected to expand at an 11.4% compound annual rate to R4.2 billion in 2021 from R2.4 billion in 2016.

The hotel sector in Cape Town flourished in 2016 as it is the dominant tourist destination in the country. Over the next five years, 55% of all the rooms expected to be added in South Africa will be in Cape Town. Durban’s hotel market attracts more tourists than Johannesburg, but fewer than Cape Town. Although Durban benefitted from the pick-up in tourism in 2016 a weak business market held back overall growth.

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Elsewhere on the African continent, a number of initiatives have taken place to promote tourism and positively impact the hotel market. The hotel market in Nigeria rebounded in 2016 with a 5.2% increase in total revenue.

In 2016 the number of tourists to Mauritius increased by 10.8%. The hotel market has benefitted from an increase in direct flights and government investments in tourism. Room revenue increased by 15.3% in 2016 due to the 9% increase in guest nights together with an increase in average room rates.

The tourist market in Kenya rebounded in 2016 following four years after decline. The Government has introduced a number of initiatives to boost tourism. Hotel room revenue is projected to grow at 6.2% compounded annually to 2021. Over the last year, tourism increased in Tanzania despite the imposition of an 18% VAT on tourism services. Calicchio adds: “Many destinations have invested in improving and promoting the quality of their tourism offering and are reaping the benefits. In addition, we are seeing the impact of technological disruption play a part over the past year in certain countries.”

Outlook: South Africa 2017-2021

The number of available rooms is projected to rise at a 0.9% compound annual rate to 63 900 in 2021 from 61 200 in 2016. Guest nights are forecast to increase at a 1.8% compound annual rate to 15 million in 2021 from 13.7 million in 2016, with occupancy increasing to 64.3% in 2021 from 61.2% in 2016.

Outlook: Nigeria – Mauritius – Kenya – Tanzania

A number of projects in Nigeria have been delayed or postponed in the wake of the recent economic uncertainty. An 18 month moratorium was placed on hotel construction in Mauritius in November 2015. “Consequently we now expect a smaller expansion in the number of available rooms that we predicted in last year’s Outlook report,” Calicchio adds. Nevertheless, there is still a lot of activity in the market for new hotels which will continue to expand overall hotel capacity.

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Nigeria is projected to be the fastest-growing market from a revenue perspective over the next five years. This is mainly due to an improved economy, continued growth in domestic tourism, and expansion in the number of available rooms. Overall hotel room revenue is expected to expand at a 14.6% compound annual rate to US$517 million (R7.6 billion) in 2021 from US$261 million (R3.8 billion) in 2016.

Mauritius is projected to be the slowest-growing of the five countries, with a 6.2% compound annual increase in room revenue. While there is a moratorium on new projects in place in the near term and relatively few rooms expected to be added through 2021, growth in the non-hotel inventory will ease pressure on average room rates.

In Kenya the number of available rooms is projected to increase from 18 600 in 2016 to 21 000 in 2021. Total room revenue is forecast to rise by 7.5% compounded annually. Tourism is the largest industry in Tanzania, accounting for more than 17% of GDP. Total room revenue is expected to rise to $371 million (R4.6 billion) in 2021 from $224 million (R3.3 billion) in 2016.

Calicchio adds: “The hotel market in each country is affected by both the local and global economy, with some countries being more dependent on foreign visitors than others. We are also seeing certain local governments continuing to invest in infrastructure and implementing other plans to unlock the substantial potential that this industry has torevenue”

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Ori- Oke Mokola, For The Records | By Toye Arulogun

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The city of Ibadan is being saturated with billboards of “Ori Oke Mokola” transformation by Goldberg, one of the lager brands from the stable of Nigerian Breweries Plc. On the A frame boards which can be sighted in some locations is the picture of Governor Seyi Makinde proudly displayed amidst the text announcing the transformation of the “tarmac” on the open space of the car park of the Cultural Centre.

For the records, the Goldberg Village which was the brand name of the proposed reconfigured recreational space called Ori Oke Mokola was a Nigerian Breweries proposal approved by Late Governor Abiola Ajimobi as recommended by the Oyo State Ministry of Information Culture and Tourism at the twilight of the unprecedented second term of the Koseleri Governor.

The transformation of Ori-Oke Mokola was to be at no cost to the Oyo State Governor while Nigerian Breweries bears the full cost of the makeover of the popular joint.

If Nigerian Breweries has completed the project at cost to the company, why the overt celebration with GSM’s picture on a project initiated by the Ajimobi government or is Nigerian Breweries playing to the gallery?

If so, the corporate giant and its Dutch headquarters need a review of its corporate social responsibility policy and steer clear of local politics.

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For the records again, the Akala administration started the dualisation of Queen Elizabeth road while the Ajimobi government completed it, yet you would never find it in any compilation or compendium on the many achievements of the only government with a two term mandate in Oyo State.

Government truly is a continuum but credit should be given to whom it is due, especially when it has not cost the borrowing government of Governor Seyi Makinde a dime, except the signature of the immediate past governor of Oyo State….unless a fresh proposal and approval happened. And even then…..

 

 

Toye Arulogun 

Immediate Past Commissioner for Information, Culture & Tourism,
Oyo State

 

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The untold story of legendary Obadoke Aare Latoosa | By Arowolo-Are Jubril

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Like many other Ibadan war lords and rulers, Mohammad Obadoke Aare Latoosa  was a native of Ilora, near Oyo. His father was Ore Orisa Oyatoosa while the mother bored Oyatooki. Both were river goddess worshippers. 

Being young and adventurous, Obadoke left his parents’ Bantu house of Okutuoje compound at Ilora for Ibadan in search of greener pastures.

Although, an altercation with a prominent Oyo ruler was said to have prompted this move.

On his arrival in Ibadan, Obadoke settled at a place around Oniyanrin-Nalende axis ( in the present Ibadan North Local Government), where he engaged in palm wine selling.

Obadoke was reputed to be versed in the knowledge of palm tree planting that he could tell the harvest period and profits with faultless precision!

Then, his palm wine selling exploits connected him with Beyioku Akere one of the promising warriors in Ibadan land. Akere later introduced him to Ogunmola who held the title of Bada under Iba Oluyole during the period.

During their meeting, Obadoke Oyatoosa’s bravery, confidence and war situation exploits impressed Ogunmola and he drafted Oyatoosa into his private army for which he later became the captain.

In the bid to have Obadoke Oyatoosa closer to him, Ogunmola settled him at a hill top which was then a dreaded forest that harbored a dangerous human eating lion! The choice of the hill top (now Oke Aare) was not particularly the making of Ogunmola who thought Obadoke could not survive the deadly animal. But Oyatoosa opted to settle in, regardless of any kind of threats!

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However, within the next few days, Obadoke caught the lion alive and took it on his shoulder to Ogunmola who was dazed with Oyatoosa’s bravery.

It’s interesting to know that Obadoke cut off the lion’s head and adopted it as one of his symbols of authority!

Having settled well at Oke Aare, he got married to Osubunmi, Ibeji and Moriola in succession but the unions were fruitless until after about 16 years when he had Sanusi as the first child. This happened after reverted to Islam and he believed that the change in religion influenced the birth of his son. There after, Obadoke adopted the name ‘Mohammad’ (Momodu in Yoruba pronunciation), with the aid of the then Emir of Ilorin, Abdul Salam who had earlier conquered Katunga, the capital of Old Oyo Empire with the fall of Afonja.

Since then, Mohammad Obadoke Oyatoosa never looked back. He was fully involved in many territorial conquests as the captain of Ogunmola’s private army from where he rose through the ranks until he got the ultimate title: Aare Onakakanfo of Yoruba land.

He started on the leadership line with the title of Are-Ago Balogun during the reign of Baale Oyesile Olugbode, (1851-1864), Otun Seriki during the time of Bashorun Ogunmola, (1865-1867) and Otun Balogun during the short reigns of Balogun Beyioku Akere (1867-1870), and Baale Orowusi Awarun Ososo (1870-1871). Akere as the Balogun during the reign of Bashorun Ogunmola was to assume the Baale position after Ogunmola’s demise but he, (Akere) deferred it until after he must have won Oke Ogun war. Although, Akere won but he died after his victorious return and few days to his installation.

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To be continued…

 

Arowolo-Are Jubril,  journalist and media consultant, sent this piece from Ibadan, Oyo state.

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Ibadan 125 room-Irefin Palace to rival London’s Buckingham Palace, Oyo govt. boasts

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Oyo State government has disclosed that the historical Irefin Palace in Ibadan has been positioned to rival the Buckingham Palace in the United Kingdom as the State has entered into agreement with private partners to promote notable tourist sites.

The State Commissioner for Information, Culture and Tourism, Dr. Wasiu Olatubosun stated this recently while playing host to the Irefin Royal Family of Ibadan at his office.

The family held an historical significance of being the descendants of Oba Onirefin who built the biggest palace of 125 rooms in the history of Yorubaland, during his reign between 1912 to 1914.

Late Oba Onirefin was noted for his philanthropic efforts, especially in promotion of education as he was said to be the highest donor to the establishment of the popular Ibadan Grammar School where he donated 100 pounds and the land upon which the school was built.

Olatubosun boasted that the Seyi Makinde led government has turned away from the old style of neglecting tourism as a means of generating internal revenue and has adopted the public-private-partnership model to develop and promote major tourist sites in the State.

“We want to work with the Irefin Royal Family to bring more attention to the tourism potential of the palace and the significance of it to humanity, the palace is not just a structure, it symbolizes love, it symbolizes philanthropy.

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“The late Oba Onirefin was a giver and lover of educational development, that is why the State government will support the family to promote the palace to be as famous as the Buckingham Palace in the United Kingdom, look at the number of people that troop to the U.K to see the palace among other sites, it will generate goodwill for the government and promote the tourism industry in the State.”

The leader of the family who doubled as the Coordinator of the Irefin Historical Palace Foundation, Prince Omokayode Ayinla Irefin said the family was happy with the stride of Oyo State government towards promoting the tourism sector in the State.

Omokayode said the Irefin Palace Heritage Tourism Development Foundation has entered into agreement with a foreign partner to train youths that are interested in tourism and send them abroad for the practical aspect of the job.

He, however called on other notable families in the State with historical potentials to emulate the Irefin Tourism foundation so as to diversify the State’s economy and gain more from foreign input into tourism.

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