Hospitality Market

The Maputo hospitality market is currently experiencing dampened market performances. The high level of new supply that has entered the market within the last two to three years, combined with reduced levels of demand, has negatively affected the hospitality market. Occupancy has declined by over 21,9 percentage points between 2014 and 2017.

Reduced demand in the hospitality market has been driven by the significant economic challenges facing the country. Aside from the hidden debt scandal, which saw a withdrawal of donor funding, the crash in commodity prices, on which the country is dependent, has limited government and corporate consumption in the hospitality market. The ADR in the hospitality market has followed a similar trend, reducing by over 16,5% over the same period.

The short-term outlook for the hospitality market in Maputo is subdued. Hoteliers expect that 2018 and 2019 will be slightly lower than that of 2017, owing to:

• Continued delays in oil and gas investments in Mozambique.
• Hosting of municipal elections (2018) and general elections (2019). Such elections generally affect the political stability of the market, and the activity of the government and foreign investors, which thus has a negative effect on the hospitality market.
• The hidden debt scandal is not expected to be solved in the short to medium term. It is expected that the government will continue to cut budgets and limit spending within the hospitality market.
• The new planned supply in the hospitality market, which currently totals 747 rooms, of which approximately 59% is expected to be realised.

In the longer term, however, the hospitality market in Maputo is expected to recover, provided that political stability continues in Mozambique, and ENI and Anadarko go ahead with the Coral LNG plant and the Area 4 investments which will bring over USD 22 billion of capital to Mozambique. Oil companies and associated supporting companies (logistics, engineering, construction, etc.) will ramp up their activities as a result. Such investments will have a positive effect on demand in the hospitality market in Maputo, as it will have transit room-nights and representatives from the companies meeting with the government.

Other factors that could improve the outlook of the hospitality market are the improvement of coal infrastructure, which will drive greater coal exports, and the hosting of international conferences in the city, now that the International Convention Centre has been opened. HTI Consulting is well positioned to provide advice on the hospitality market in Maputo (and other cities).

Please contact us on 021 685 0635 or info@hticonsulting.co.za.