Highest hotel prices in Africa – and how SA fares

A survey of prices of international grade hotels in selected major African cities has revealed that Addis Ababa is the most expensive place for a good night’s sleep.

Produced by hospitality research firm STR Global, ahead of the Africa Hotel Investment Forum (AHIF) at the end of September, the report found the average rate in US$ (constant currency) for a hotel room in the first six months of this year in Addis Ababa was $231.78/ night.  This compares with $215.75 for a room in Lagos, $144.76 in Nairobi, $122.30 in Cape Town, $105.73 in Casablanca, $103.54 in Cairo, $72.90 in Johannesburg and $70.70 in Sharm El Sheikh.

When one notes that the price of a hotel room in Nairobi is almost double that in Jo’berg and the room rate in Addis is 60% more expensive than Nairobi, the question is why are prices so different.

Thomas Emanuel, director of business development, STR Global, says: “A great deal of the reason for the difference in rates across major African cities is simply supply and demand.” 

Addis Ababa has a shortage of top quality hotels.  However, with the Ethiopian economy growing at a rapid rate of more than 10% per annum for the whole of the last decade, with more conferences coming to the city by virtue of its status as the seat of the African Union and with Ethiopian Airways on a similar growth trajectory to the country, thanks to new routes and increased passenger numbers, there is a high demand for premium hotel rooms. 

By comparison, Johannesburg is a long-established, sophisticated international city, with a large number of 5* hotels and a competitive market for accommodation.
Looking at how hotel prices have changed over the past year (year to date June ’14-’15), there have been substantial rate rises in Sharm El Sheikh, up 42.5%, Addis Ababa, up 14.9%, Johannesburg, up 11.0%, Cape Town, up 10.8% and Cairo, up 10.6%.