Africa -  Mozambique - Maputo

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HVS In-Depth Africa Hotel Valuation Index:   2016 | 2015 | 2014

The Mozambican GDP growth dropped to 2.5% in 2017, led by a shy mining sector, notably coal and aluminium. The reduction in foreign direct investment as a result of the hidden debt crisis continues. Investors and developers stepped back due to the lack of information in Mozambique. Although the country experienced a strong recovery in 2016, it has proven to remain quite fragile. In addition, the recovery of the oil and gas industry, initially forecasted in 2019/20, was pushed to 2022/23 which had a negative impact on both the economy and tourism. Economic growth shrank, and hotels’ occupancy dropped significantly. Hotel values experienced a drop of 23.7% although were still higher than in 2015 demonstrating a turbulent economy dependent on oil and gas.

However, the government’s efforts to improve investors’ confidence have not been futile. Several international institutions agreed to free funds to help the economic diversification of the country amongst which are the EU, the World Bank and the African Development Bank. The government took measures to boost the business environment and promote and diversify tourism such as easier visa regulations, rehabilitation of natural reserves and improved services and infrastructure. In addition, the opening of the new supply in Maputo is likely to induce demand; Stay Easy just opened and a Melia and City Lodge are expected to open in 2019.

Maputo has been defined as one of the top five priority destinations for investment in Mozambique tourism. The capital has benefited from the boom in sub-Saharan tourism as well as the open skies that attracted international airlines to fly direct to Maputo. 2018 shows positive trends. Values are forecasted to be up by 1.8% in 2018. The increase in demand in 2019 will partially offset the 22% increase in supply leading to a limited drop in values whilst 2020 is likely to show an increase in values of 12%.

The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide. Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the hospitality investment market.

In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.

Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide insights on the likely trajectory of decline and recovery for hotel values.

For the Latest Information and Analysis on the Impact of COVID-19Click Here

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For more information, please contact:

Tim Smith, MRICS
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Rishabh Thapar
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