The expansion comes as international arrivals across the continent rise by 8% in 2025, the strongest growth globally, according to UN Tourism, which estimates around 81 million visitors to Africa.
As travel demand strengthens across key leisure and business destinations, hotel development is accelerating to address growing pressure on accommodation supply.
Africa’s record tourism performance is increasingly reflected in its accommodation sector, with hotel development rising across established cities, safari destinations and emerging urban markets.
UN Tourism data shows the continent leading global regions in visitor growth, creating sustained pressure on existing hotel stock and driving new investment into accommodation infrastructure.
The result is a broad-based expansion of hotel development activity rather than isolated market growth.
While tourism demand continues to rise, the profile of investors funding new hotel developments is shifting in several Southern and Eastern African markets.
Local and regional capital is playing a greater role in financing accommodation projects, particularly through institutional investors such as pension funds.
“We're not seeing global capital flowing into African hospitality. Investment in this region is driven by local and national players, within their own countries,” says Daniel Trappler, senior director of development for Southern and Eastern Africa at Radisson Hotel Group.
He adds that institutional participation is increasingly equity-driven.
“The investor landscape has moved more towards pension funds and institutional money, which is only equity and no debt.”
Across the Southern African Development Community (SADC), pension funds are gradually increasing allocation to alternative assets as part of broader diversification strategies.
Research by Intellidex, commissioned by Financial Sector Deepening (FSD) Africa and SAVCA, highlights sustainability, diversification and risk-adjusted returns as key investment priorities for regional pension funds.
Within this context, hotels are increasingly viewed as aligned with long-term investment horizons, given their ability to generate stable income once operational.
Several pension-backed institutions are already participating directly in hospitality-linked developments across the region:
• Tanzania’s National Social Security Fund is developing two hotels
• Zambia’s National Pension Scheme Authority owns a hotel in Livingstone
• South Africa’s Municipal Employees Pension Fund owns and operates a hotel at OR Tambo International Airport and is developing another in Mpumalanga
These projects reflect a growing overlap between tourism infrastructure development and institutional investment strategies.
East Africa remains the most active region for hotel development on the continent, with Kenya, Ethiopia and Tanzania each reporting close to 80% of planned rooms already under construction.
“This is a significantly higher actualisation rate than the continental average and a sign that announced projects in the region are moving from paper to reality faster than elsewhere,” says Trappler.
The pace reflects sustained tourism recovery and strong demand in both urban centres and safari-driven markets.
Beyond established destinations, new growth markets are emerging as tourism demand spreads and accommodation gaps become more visible.
In Zimbabwe, Harare is attracting attention due to limited internationally branded hotels with conference and events facilities.
“Pension funds in the country are sitting on significant capital and looking to deploy it, and the gap in Harare's hotel market is becoming increasingly visible to them,” says Trappler.
Victoria Falls continues to benefit from strong leisure and MICE demand, while Bulawayo is emerging as an underserved business travel hub.
Zanzibar is also gaining traction as a resort destination, alongside broader investment interest in Tanzania, Kenya and Morocco over the next three to five years.
As tourism demand continues to grow, hotel development is expanding across Africa’s key markets, with increased activity in both primary and secondary cities.
Across the continent, operators are responding to structural demand shifts by adding capacity in high-growth destinations where occupancy trends and future travel demand remain strong.
Recent developments in South Africa’s coastal and business hubs reflect this broader trend, particularly in secondary city markets where demand for branded accommodation continues to rise.
Africa’s tourism recovery is now translating directly into infrastructure expansion, with hotel development accelerating across multiple markets as visitor numbers and travel demand continue to rise.
The result is a continent-wide shift in accommodation capacity, shaped by both tourism growth and evolving investment structures supporting long-term development.
