Zanzibar Hotel Market Update June 2019
Record-high tourism demand shape a bright future for Zanzibar’s tourism sector Slow development of new supply is limiting broader success “Looking at Zanzibar’s tourism market for the past decade, the number of arrivals expanding by 15% CAGR between 2008 and 2018. Last year, passenger arrivals to Zanzibar achieved more than half a million, indicating over 20% increase compared to the previous year. It is the third consecutive year for the island to reach double-digit growth, followed by 28% in 2016 and 15% in 2017.
Airport & Seaport Passenger Arrivals Number of Passengers
%
600,000
90
500,000
70
400,000
50
300,000
30
200,000
10
100,000 0
Tourists can access Zanzibar either by international/domestic flights or ferries from Dar es Salaam. Through the past three years, airport passenger arrivals are the key indicator to drive the escalating total arrival numbers. Passengers entering by air rose 25% in 2018 compared to 19% in 2017. Domestic flights are a key segment which surged by 36% y-o-y to over 140,000 passengers. In contrast, arrivals through the seaport have declined slightly for two consecutive years since 2016.
-10 2014
2015
Passenger Arrivals
2016
2017
2018
Annual Growth Rate
Source: Zanzibar Commission for Tourism and C9 Hotelworks Market Research
Looking forward, both public infrastructure and the real estate sector is expanding on the island. With more upcoming international branded hotel developments, the destination is forming set to widen its global awareness and recognition. Bill Barnett, Managing Director, C9 Hotelworks
Trends
Forward Outlook
•
Israel dropped out from the top five geographic source market with a sharp decrease of 34% in 2018 compared to the previous year.
•
Most pipeline accommodation establishments are focused in the upscale tier with a number of them having international brand affiliations.
•
Travelers from Russia, North America, and Australia doubled their volume in 2018 versus 2017, with the major contributor being improved flight connectivity.
•
A second terminal at the gateway Abeid Amani Karume International Airport is onging, which is expected to serve up to 1.5 million passengers annually upon completion.
•
While seasonality has remained consistent, July and September have shifted from shoulder periods into a rising trajectory in the annual demand cycle.
•
Over the past five years, tourism demand growth has surpassed supply growth, indicating a positive performance for the hospitality industry.
TOURISM Demand Indicators As of 2018, passenger arrivals by air and sea to Zanzibar totaled 520,809 with the airport being the key entry point. This represented 87% of the total arrivals.
Zanzibar Passenger Arrivals to Airport and Seaport Number of Passengers 50,000
Airport arrivals grew 25% y-o-y in 2018, while those by sea declined by 4%
40,000 30,000 20,000 10,000 Jan
Feb
Mar
Apr
Airport - 2017
May
Jun
Jul
Airport - 2018
Aug
Sept
Oct
Seaport - 2017
Nov
Dec
Seaport - 2018
Source: Zanzibar Commission for Tourism and C9 Hotelworks Market Research
Seasonality
Seasonal trading continues to be a fact of the market, though shoulder periods are rising
Number of Passengers 60,000 50,000 40,000 30,000 20,000 10,000 Jan
Feb
Mar
Apr
May
Jun
2018
Jul
Aug
Sept
2017
Oct
Nov
Dec
2016
Source: Zanzibar Commission for Tourism and C9 Hotelworks Market Research
Geographic Source of Business - 2018 Top 5 Source Markets
2% 3%
10%
Europe
55,755
2. North America
47,896
3. Germany
42,246
4. France
30,410
5. UK
30,180
The Americas
11%
14%
1. Italy
Asia 60%
Africa OCEANIA Others
Source: Zanzibar Commission for Tourism and C9 Hotelworks Market Research
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C9 Zanzibar Hotel Market Trends: June 2019
HOTEL MARKET Hotel Supply Accommodation Establishments Number of Rooms
Total accommodation establishments is 8,755 keys, representing a 2% increase in 2018 compared to the previous year
Number of Establishments
9,000
600
8,500
400
8,000
200
7,500
2014
2015
2016 Rooms
2017
2018
Hotels
Source: Zanzibar Commission for Tourism and C9 Hotelworks Market Research
Accommodation Establishments in Key Areas
Properties are mostly located in beach areas with the south and the north having the highest concentration
Number of Establishments 60
40
20
0 Jambiani
Nungwi
Stone Town
Matemwe
Paje
Source: Zanzibar Commission for Tourism and C9 Hotelworks Market Research
Accommodation Mix - Upscale & Luxury Tier
Majority of inventory in upscale and luxury properties is guest rooms (63%), while small boutique luxury hotels have villas
Number of Keys 500 400
300 200 100 0 Guest rooms
Suites
Villas Source: C9 Hotelworks Market Research
C9 Zanzibar Hotel Market Trends: June 2019
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About C9 Hotelworks C9 Hotelworks is an internationally recognized consulting firm with extensive experience in the Asia Pacific region. Its core business focus includes: • • •
Hotel and Resort Development Asset Management / Ownership Representation Project Feasibility and Analysis
Key competencies include international hotel operator search, selection and contract negotiation, mixed use hotel and residential planning and operation reviews. A wide range of both institutional and private developers and a comprehensive portfolio of completed projects give C9 the skill set and background to focus on key issues, evaluate complex ones and assist clients in achieving solid results. Based in Phuket, Thailand and led by Managing Director Bill Barnett, who has 30 years of experience in Asia Pacific, the firm is well positioned to serve an increasing demanding marketplace.
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand
T: +66 (0)76 325 345 www.c9hotelworks.com info@c9hotelworks.com