Hospitality Research in Mogadishu

Hospitality Research in Mogadishu

Hospitality research recently undertaken in Somalia shows that for investors with an appetite for risk, Mogadishu can deliver positive returns. Whilst the research shows that safety and security remain strong drawbacks in Mogadishu, the situation is improving, as efforts are being made by the government and its partners to reduce the number of terror attacks.

Unsurprisingly, the hospitality research shows that the hotels located within the safe zones are performing at higher levels than the rest, despite offering what is widely known as “container hotels”. The rooms and public areas of these hotels are portable and resemble old shipping containers that are assembled in Europe and transported to their final destinations. The research shows that some of these “container hotels” offer up to 150 rooms with facilities including conferencing facilities, gyms, and even the ability to offer food and beverage.

The hospitality research indicates that hotels of this nature can achieve rates upwards of USD 150 with occupancies well above the 65% mark. In fact, the Mogadishu market as a whole, which includes container and brick and mortar hotels, is performing well with a positive occupancy growth of 5,2% since 2016. This growth was achieved despite an increase in the number of rooms in the market. The positive growth has been driven by perceptions of safety and as a result, aid workers are prepared to increase their presence on the ground, and corporate companies (to a degree) are seeking to expand their presence in the country. Furthermore, the research shows an increase in the number of Somali diaspora returning to the country to identify business opportunities.

The positive trading conditions in Mogadishu have attracted investors and currently, there are approximately 200 new rooms planned to enter the market between 2019 and 2022.

Whilst there are opportunities for investment in the hotel sector in Mogadishu, the risks remain significant. A number of car-bomb attacks have occurred in recent weeks as the Somali Government continues its attempts to consolidate its position and root out terrorist groups.

In conclusion, security remains the primary issue for any hospitality investment in Mogadishu, and despite extensive security measures, developments such as hotels remain the primary targets for terror attacks.