The African Hotel Revolution: Zimbabwe, Zanzibar, Kenya, and South Africa Drive Growth in Tourism and Hospitality, All You Need to Know
Africa’s hotel industry is experiencing rapid expansion, with 577 new hotels and resorts currently under construction across the continent. This growth will add over 104,000 rooms to the market, significantly strengthening the tourism and hospitality sectors. The continent’s hotel development is advancing at a pace of 13.3%, well above global averages, with much of the momentum driven by sub-Saharan Africa. As the demand for tourism continues to rise, countries such as Zimbabwe, Zanzibar, Kenya, and South Africa are seeing substantial investments, capitalizing on the increasing potential for growth in these regions.
Zimbabwe Emerges as a Key Growth Market
Among the many markets seeing expansion, Zimbabwe stands out as a major growth hotspot. Once considered a politically unstable and expensive destination, Zimbabwe is shedding its old image and positioning itself as a favorable investment location. Significant hotel developments are underway in cities such as Victoria Falls, Harare, Bulawayo, and Mutare. These cities, known for their natural beauty and rich history, are now more accessible due to the country’s government slashing tourism fees and investing in infrastructure upgrades. The combination of improved infrastructure and competitive pricing is expected to position Zimbabwe as a leading growth market in the region.
Zanzibar’s Untapped Potential
Zanzibar, an archipelago off the coast of Tanzania, is also seeing increased investor interest due to its untapped potential. Despite rising demand, especially from Eastern European and US tourists, there has been a relative shortage of hospitality options on the island. Recent data shows that Zanzibar welcomed over 105,000 visitors in August 2025, a 46% increase in international arrivals compared to previous years. With occupancy rates at an impressive 88.5%, the gap between demand and supply is clear, offering an excellent opportunity for hotel brands to enter before the market becomes saturated.
Kenya and South Africa Drive Diverse Regional Growth
Both Kenya and South Africa are fueling diverse regional growth in the hotel sector. Kenya, for example, is expected to see its travel and tourism sector contribute a record KSh1.2 trillion to its economy in 2025, surpassing pre-pandemic levels by 24%. The country’s travel sector is also set to create over 1.7 million jobs. Similarly, South Africa is witnessing strong domestic spending in its hospitality sector, with R445 billion being directed towards leisure and tourism. Both countries offer unique opportunities for business, leisure, and MICE (meetings, incentives, conferences, and exhibitions) tourism, further driving hotel industry growth.
Overcoming Challenges in Hotel Development
Despite the rapid growth, the hotel development process in Africa is not without challenges. High construction costs, securing proper financing, and lengthy delays in infrastructure development remain significant hurdles. In some remote areas, basic utilities and zoning approvals can take years to obtain, causing delays in project timelines. Banks, particularly in South Africa, prefer the predictability of retail or office lease income, making it harder for hotel projects to secure financing, given the fluctuating revenue streams hotels generate.
To address these financing challenges, some developers have turned to innovative solutions, such as performance guarantees, to ensure a minimum level of profitability for hotel owners. These guarantees, which can last for 10-15 years, help mitigate the risks for both banks and developers, facilitating loan agreements. Other strategies, like sectional title ownership schemes and serviced apartments, are also becoming more popular, offering structures that align better with both investor expectations and the realities of financing.
A Growing Market with Long-Term Potential
Sub-Saharan Africa’s hotel sector is quickly becoming one of the most dynamic hospitality markets globally. While there are still challenges to overcome, the long-term growth prospects are immense. With the urban population of Africa expected to double by 2050, the hospitality sector is poised to play a vital role in the continent’s economic development. Every new hotel constructed is not just a business venture but a critical hub for job creation, a gateway for foreign investment, and a key part of Africa’s economic future. As the demand for world-class accommodations continues to grow, countries like Zimbabwe, Zanzibar, Kenya, and South Africa are primed for continued investment and development.
Africa’s hotel industry, with major growth in places like Zimbabwe, Zanzibar, Kenya, and South Africa, is a testament to the continent’s booming tourism sector and its increasing appeal to investors. While there are hurdles in financing and infrastructure, the future of hospitality in Africa remains bright, offering lucrative opportunities for developers, brands, and investors alike.
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