African Pension Funds Drive Record Hotel Pipeline as Local Capital Reshapes Hospitality Investment
Africa's hotel development pipeline has reached 675 projects totalling 123,846 rooms - an 18.6 per cent increase year-on-year - underpinned by an 8 per cent rise in international arrivals to approximately 81 million visitors in 2025, according to UN Tourism. While such growth would typically attract global capital, Radisson Hotel Group's Senior Director of Development for Southern and Eastern Africa, Daniel Trappler, says a different trend is emerging. "Investment in this region is driven by local and national players, within their own countries," he said, noting a shift towards pension funds and institutional equity investors rather than debt-funded global capital. South Africa's Municipal Employees Pension Fund already owns and operates a hotel at OR Tambo International Airport and is developing a second property in Mpumalanga, due to open later this year, both in partnership with Radisson. Tanzania's National Social Security Fund is developing two hotels, and Zambia's National Pension Scheme Authority owns a hospitality asset in Livingstone - together reflecting a broader regional pattern of African capital backing African infrastructure.
East Africa is leading the development charge, with Kenya, Ethiopia, and Tanzania converting close to 80 per cent of planned hotel rooms into active construction - well above the continental average. South Africa's more mature financial sector positions it as a potential anchor for further expansion, particularly in secondary city markets, with Radisson's planned 155-room Umhlanga Ridge serviced apartments development due for completion in 2029, reflecting growing interest in mixed-use and extended-stay offerings. Harare is also emerging as a market to watch, with a shortage of internationally branded conference hotels creating clear entry opportunities for investors. Tanzania, Kenya, and Morocco are identified as the strongest growth markets over the next three to five years. "We are at an inflection point," said Trappler. "Africa's hospitality story is no longer one of potential. It is one of progress."
Source: Sunday World
