Zimbabwean hotels are set to benefit from a bumper US$300 million capital injection, a move which will likely boost the resurrection of the industry and help foster economic growth.
According to the latest research from Cape Town-based hospitality analyst, Wayne Troughton, of HTI Consulting, who will also be a keynote speaker at this year’s ZimReal Property Forum, the sector’s emergence as a vehicle for economic growth has captured the attention of local investors, developers and international brands.
HTI Consulting’s data is good news for the Zimbabwean economy and real estate sector says forum host Kfir Rusin.
“There has been a lot of interest in the country as a destination and while the economy has been under pressure, hospitality is resilient and the market is reporting a significant rise in tourists visiting the country in 20 years.”
According to Troughton, the majority of the interest is targeted at Victoria Falls; however, interest is picking up in Harare and Bulawayo from private equity investors and local pension funds investigating opportunities.
“Victoria Falls is seen as a separate economy from Zimbabwe. The node is less impacted by political and economic challenges and the free-flowing of foreign exchange enables from a stronger internal economy that other hubs.”
Despite the Falls’ dominance in the sector, the change in government and economic turnaround in 2018 sparked significant interest in the Harare and Bulawayo nodes after years of little or no growth. However, research indicates that real development activity is only likely to be piqued once the economy displays a more sustained an upward trajectory.
In these nodes, current data indicates that the opportunities in Harare and Bulawayo are ideal for larger mid-priced developments for business travellers and conference attendees ranging from 80 – 150 rooms respectively, while private investors are eyeing smaller hotels in suburban locations with lower room counts.
In contrast, the sentiment in Vic Falls is robust and bullish – which is due to increased air connectivity explains Troughton. According to him, the improved access to key nodes such as Harare and Victoria Falls which have aided in growing the tourism industry with Victoria Falls often incorporated into a Southern African circuit due to its connectivity to Cape Town.
“Air accessibility and the ability to connect with other major destinations in Southern Africa is key to the development and success of the sector.”
This improvement in access has, in part, resulted in numerous international brands once again showing an interest in the market.
“We’ve seen brands having shown interest in the town and undertaking reconnaissance trips post the change in government,” says Troughton.
While the bump in interest by international brands can be attributed to the change in government, the interest in Victoria Falls is also based on actual demand with shortages being reported in peak season.
In this current environment, the most attractive opportunities that can be readily accessed are in the midscale conference and high-end luxury markets along quieter sections of the river.
“Obviously, we’ve seen the currency news, but hospitality is resilient in Africa and we’re seeing a number of top international brands registering to attend for ZimReal to learn more, network and do business,”
“The number of brands, investors and developers interested in hospitality provides hope for a sustained sector turnaround and hopefully can be the spark that will drive the economy forward. We’re looking forward to debates, business matchmaking and great presentations from a number of speakers from the public and private sector,” said Rusin.