The hotel market in Mozambique is expected to boom in the next couple of years. Hotel values in Maputo have jumped 133% in 2016 with a compound annual growth rate of 36,6% between 2010 and 2016, making it the most improved market in Africa in terms of hotel values.

This is according to the latest Hotel Valuation Index (HVI) published annually by HVS Global Hospitality Service. It monitors annual percentage changes in the values of typically four- and five-star hotels in 23 major African cities and ranks each market relative to an African average.

Topping the ranks of the HVI 2017 in terms of most improved hotel values are, in declining order, Maputo, Mauritius, the Seychelles, Windhoek, Casablanca, Kampala, Dakar, Cairo, Nairobi, Cape Town, Lomé and Accra.

The worst performing African cities in terms of hotel values are Sharm-el-Sheikh (-54%), Harare (-36%), Marrakech (-23%), Addis Ababa (-16%), Dar es Salaam (-15%), Johannesburg (-11%), Gaborone (-11%), Durban (-7%), Lagos (-10%), Lusaka (-1,2%) and Abidjan (-0.8%).

HVS Cape Town consultant, Laura Dutrieux, says markets such as Mozambique, Senegal and Uganda are on the rise because of political stability, government promotion of international tourism and removal of visa restrictions. Others, such as Sharm-el-Sheikh, Harare and Marrakech, have to cope with terrorism or political instability.

She says while tourism prospects in Africa may not be as positive as previously thought because of the impact of oil prices and the economic downgrade in South Africa, most African countries are experiencing slow, but realistic growth, that investors can rely on.

The challenge was to create a ‘Brand Africa’ that could be promoted around the world. Continuing to hamper this were issues of inaccessibility with lengthy and expensive flights and no competition on air routes still being the norm. However, some markets like Kenya and South Africa were receiving more direct international flights and seeing more local low-cost carriers emerging.

Visa availability was still being plagued by lengthy procedures and corruption, but this is beginning to be addressed. The African Union has launched the African Visa Openness Index, which encourages countries to open up and allow greater movement of people. Some 44 borders in Africa are now issuing visas on arrival.

Dutrieux said Cape Town would add 2 500 new hotel rooms in the next year, new direct air routes were coming online and rates were expected to increase by an average 6,6%. However, while hotel values were booming in rand terms, the fluctuating currency value meant returns looked far less exciting when converted into US dollars.

Director Executive for Grupo PIN Mozambique, Sergio P. Muchanga, said: “From what I can see, the majority of visitors staying in the new hotels are not from the region. They are mostly from countries from where Mozambique is getting new investment.”

Muchanga said these countries included Turkey, various Arab States, China, Portugal, and numerous consultants from across the globe who were involved in development business, including South Africa.