Africa -  Zambia - Lusaka

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

Zambia has one of the most open trade environments in Africa with businesses benefiting from among the lowest profit taxes in the region. Increasing regional cooperation through multilateral organisations, indicate a commitment by the government to stay open for investment and trade. Driven by a recovery in copper prices, the agricultural and the electricity and gas sectors the country’s economy grew modestly by 3.6% in 2017. It is forecast to increase its growth by 4% in 2018 and by 4.5% in 2019 and 2020 according to the IMF, following a weaker trend in 2015 to 2016.  These factors and a lower inflation level give investors’ confidence. Also, the risk of instability has receded with the release of opposition leader Hakainde Hichilema in August 2017.

Even though the Cholera outbreak in October 2017 negatively impacted some travel decisions, passenger movements at all Zambian airports increased by a 10.9% in the fourth quarter of 2017 compared to the same quarter in 2016 due to increased flight frequencies and the commencement of flights by Mahogany Air. Furthermore, Lusaka is planning to spend US$ 500 million in airport construction projects and the government has announced a revival of the national airline through a partnership with Ethiopian Airlines.

Hotel supply grew by 5% in 2017 and with a projected 3.9% per year rise in travel and tourism investment by the government (WTTC Zambia 2017) over the next ten years, the hotel supply continues to grow by 11% in 2018 and by 13% in 2019. Hilton Garden Inn Lusaka Society Business Park will open on the 30th August 2018 for reservations. The 82-room Sarovar Premiere Lusaka is expected in September. A 136-room Park Inn by Radisson will open in 2020. Protea Hotels by Marriott recently signed an agreement with Union Gold Zambia Limited for the construction of the new 241-room Protea Hotels by Marriott Bonanza Estate scheduled in 2021.

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.

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