At a Glance
- Tourism recovery and demographics are repositioning African resorts as a strategic asset class.
- Undersupplied leisure markets deliver yield premiums versus mature Western destinations.
- Global hotel brands and ESG frameworks are reducing risk and attracting long-term capital.
Institutional investors are accelerating capital allocations into African resorts as the continent emerges as one of the world’s fastest-growing hospitality and tourism markets.
What was once viewed as a frontier play is now being repositioned as a strategic asset class, supported by strong tourism recovery, favorable demographics, infrastructure upgrades and yield premiums that outpace many mature global destinations.
From private equity and pension funds to sovereign wealth vehicles and listed REITs, long-term capital is increasingly flowing into luxury resorts, beach destinations and safari lodges across Africa, driven by both global travel demand and rising domestic consumption.
Africa’s next tourism growth engine
Africa’s tourism sector has moved decisively into recovery mode, with international arrivals surpassing pre-pandemic levels in several key markets.
Morocco, one of the continent’s strongest performers, welcomed 17.4 million visitors in 2024 and maintained double-digit growth into 2025, underscoring renewed confidence in leisure travel across North and Sub-Saharan Africa.
The rebound is being led by experiential and luxury tourism, where demand is strongest for destinations that combine natural landscapes, wildlife, culture and privacy.
As a result, resort developments are expanding faster than traditional city hotels, with global development pipelines for leisure-focused properties growing by more than 30% year on year.
For institutional investors, this shift signals more than a cyclical tourism bounce. It reflects a structural re-rating of Africa as a long-term tourism growth market.
Demographics are reshaping demand
Africa’s youthful, rapidly urbanizing population is creating a powerful domestic travel base alongside international arrivals. Industry forecasts point to near-9% annual growth in Africa’s hospitality sector, with revenues projected to approach $14 billion by 2027.
Rising disposable incomes, improved air connectivity and visa liberalization—supported by regional integration initiatives such as the African Continental Free Trade Area—are boosting intra-African travel.
Resorts that cater to both regional and international guests are benefiting from diversified demand, stronger occupancy rates and improving average daily rates in markets such as Kenya, Tanzania, Rwanda and Senegal.
This demographic tailwind aligns with institutional investors’ preference for assets anchored in long-term consumption trends rather than short-term market cycles.
Yield premiums in an undersupplied market
Beyond growth, African resorts offer yield advantages that are increasingly difficult to find in saturated Western tourism markets. Prime destinations such as Zanzibar, Cape Verde, the Maasai Mara and parts of the Indian Ocean coastline remain structurally undersupplied, even as demand accelerates.
That imbalance is attracting patient capital willing to underwrite longer development timelines in exchange for higher return profiles.
Pension funds, sovereign wealth funds and development-backed investment vehicles are financing large-scale resort projects, luxury eco-lodges and mixed-use hospitality platforms that combine accommodation, wellness and experiential tourism.
Compared with urban hotels, these assets offer stronger pricing power and resilience, particularly in premium leisure segments.
Global brands reduce execution risk
International hotel groups are playing a central role in institutional capital flows. Brands including Marriott, Hilton and Radisson are rapidly expanding their African footprints, providing investors with operational expertise, global distribution networks and brand recognition.
Marriott plans to add more than 50 properties across Africa by 2027, while Hilton is targeting a significant expansion of its resort and lifestyle portfolio. For investors, branded partnerships reduce operational risk, improve revenue per available room and enhance asset liquidity.
Increasingly, institutional capital is backing platform strategies rather than single assets, enabling scale, balance-sheet strength and access to long-term financing.
ESG is now core to the investment Case
Environmental, Social and Governance considerations are no longer optional in hospitality investment. Sustainable resorts—ranging from carbon-neutral eco-lodges to renewable-energy-powered beach properties—are attracting capital from funds with strict ESG mandates.
Institutional investors are tying financing terms to sustainability benchmarks, responding to traveler preferences that increasingly favor environmentally responsible accommodations. For resorts, ESG integration is translating into stronger brand equity, pricing power and long-term occupancy stability.
Risks remain, but capital is adapting
Challenges persist, including regulatory complexity, infrastructure gaps and political risk in certain markets. However, investors are mitigating exposure through partnerships with development finance institutions, local operators and governments, securing incentives and improving project bankability.
Technology is also lowering barriers to entry. Digital booking platforms, data-driven marketing and AI-powered revenue management systems are enabling faster scaling and better performance visibility across resort portfolios.
For institutional investors seeking growth, yield and diversification, African resorts are no longer a speculative bet. They are fast becoming a core component of global hospitality investment strategies.
