African hospitality businesses are bullish on prospects for 2024 as bleisure travel continues to gain traction and hotels adopt modern technologies, notably Artificial Intelligence to drive efficiency.

Hospitality businesses across Africa are optimistic about the future and a majority of them feel bullish, thanks to continued strong growth of bleisure, according to the new African Hospitality Confidence Index for 2024.

According to a press statement, the Index surveyed 537 respondents in 30 African countries to produce a snapshot of the continent’s hospitality industry and its perceptions for the future. The statement adds that the survey also recorded increasing use of Artificial Intelligence technology.

“Overall, the majority of respondents are positive and, following the pandemic, we all know what that meant for the country as a whole. So in general, people are looking at the future with confidence,” says Chantel Dipple, Knowledge Manager at Moore Global, who presented the findings of the report in Cape Town in South Africa recently.

The report reflects that, overall, African businesses in the sector are confident, with 80 pc of respondents indicating that they feel positive in the medium to long term, over 12 months. About 68 pc reported feeling positive or very positive about the current state of the industry.

The report says that AI is a major buzzword for industries across the board, and the hospitality industry is no different. According to the report, global AI spend in the hospitality market was valued at USD 90 million in 2022, expected to grow at a compound annual growth rate of 60 pc into 2033.

The report indicates widespread familiarity with the technology, with 79 pc of businesses surveyed indicating some level of familiarity, although one in five businesses indicated that they were not at all familiar with AI. Almost a quarter or 23.17 pc indicated that they were already using AI technologies or systems in their operations. 

Some of the challenges identified by African operators, however, included the cost and resource allocation, as well as data privacy and security.

Global Director of Sectors and Markets Regional Director Moore Global Africa & Middle East Jeff Blackbeard says that proper planning for the implementation of AI was required. “If you are retrofitting AI into legacy systems, you’re going to be hit six love,” Blackbeard adds.

He says that the people who knew and understood the technology the most, were also not likely to be in senior management in businesses.

Bleisure customers account for a growing share of the total customer base in Africa, with 92 pc of survey respondents describing bleisure customers as significant. Respondents also indicated that increased occupancy translated into increased revenue, with 76 pc indicating some kind of positive impact on revenue generation.

Dipple says that, in addition to bleisure, African countries should be looking to take advantage of events-based travel. She said the global response to the Taylor Swift Eras Tour, which has resulted in massive tourist incomes for countries hosting her, was an example of the growing trend towards events-based travel.

“With Africa becoming more of an events consideration, whether that is for sport, music or other business-type events, this is a trend to look out for in the years to come,” she says.

Increased confidence is also seeing a more positive outlook on the finance side, with about 7 pc of respondents indicating that they planned high-level capital expenditure (CAPEX) over the next year compared with just 3 pc in 2023. In the medium to long term, 11 pc of respondents were planning to undertake CAPEX projects, compared with 5 pc in 2023.

The report adds that inflation, however, remains a concern, contributing to higher costs in food and energy specifically. Higher interest rates have also had an impact, with 46 pc of respondents saying they have had to explore alternative finance options or adjust their financial strategies. When asked what revenue management practices they were currently using in their businesses, more than half of operators or 52.7 pc indicated using dynamic pricing, 42 pc said they were using upselling and cross-selling, 40 pc used group and event pricing and 38 pc implemented seasonal pricing. One in ten said they were still using practices like overbooking.