Africa's hotel development pipeline has reached its highest level on record, with 675 hotels and resorts totalling 123,846 rooms currently under development, up 18.6% year-on-year. The growth is underpinned by an 8% rise in international tourist arrivals in 2025, the strongest of any region globally, with the continent welcoming approximately 81 million visitors according to UN Tourism. In Southern and Eastern Africa, the development story is being written by a less obvious cast of investors.

"We're not seeing global capital flowing into African hospitality. Investment in this region is driven by local and national players, within their own countries,” says Daniel Trappler, Senior Director of Development for Southern and Eastern Africa at Radisson Hotel Group.

In that region, local capital is increasingly coming from pension funds rather than private individuals. "The investor landscape has moved more towards pension funds and institutional money, which is only equity and no debt.” The alignment is practical: hotel investment requires patient capital, and pension funds, mandated to generate long-term returns for their members, have both the time horizon and the need for yield that hotel assets can provide once stabilised.

This shift reflects a broader trend documented across the Southern African Development Community (SADC). Research by Intellidex, commissioned by Financial Sector Deepening (FSD) Africa and the Southern African Venture Capital and Private Equity Association (SAVCA), found that sustainability, diversification and high risk-adjusted returns are among the most important investment objectives for pension funds in the region. Alternative assets, including private equity and private debt, are increasingly being recognised as viable vehicles to meet those objectives, with most pension funds in the region confirming that their investment policies already allow for allocation to these asset classes. Hotel development, as a long-duration real asset with predictable income once stabilised, fits squarely within that framework.

Pension fund investment in the sector is gaining traction. Tanzania's National Social Security Fund is currently developing two hotels in the country. In Zambia, the National Pension Scheme Authority owns an operating property in Livingstone. In South Africa, the Municipal Employees Pension Fund owns and operates a hotel at OR Tambo International Airport and is developing a second property in Mpumalanga, due to open later this year. All are partnered with Radisson Hotel Group.

East Africa is currently leading the continent in construction momentum, with Kenya, Ethiopia and Tanzania each having close to 80% of their planned hotel rooms already under construction. “This is a significantly higher actualisation rate than the continental average and a sign that announced projects in the region are moving from paper to reality faster than elsewhere,” notes Trappler.

Specific markets within Africa present distinct investment cases. In Zimbabwe's capital, Harare, the absence of internationally branded hotels with dedicated conference and events facilities is creating demand that Trappler says established investors are beginning to recognise. "Pension funds in the country are sitting on significant capital and looking to deploy it, and the gap in Harare's hotel market is becoming increasingly visible to them." Radisson Hotel Group has signed a property in the city. Victoria Falls draws on leisure and MICE demand, with the group's Park Inn by Radisson resort currently under development there. Bulawayo, Zimbabwe's second city, is a third market the group is actively considering, where regional business travellers and cross-border traders are currently underserved by existing accommodation options.

Zanzibar is also drawing attention as a priority resort market, reflecting broader investor interest in Indian Ocean leisure destinations. Trappler points to Tanzania more broadly, alongside Kenya and Morocco, as markets likely to see the most significant hospitality investment activity over the next three to five years.

Radisson Hotel Group has reached a significant milestone on the continent, with more than 100 hotels in operation and under development across Africa. New signings continue to build on that momentum, including Radisson Serviced Apartments Umhlanga, a 155-room extended-stay property planned for 2029 within Umhlanga Ridge, one of Durban's most established commercial and lifestyle hubs, reflecting growing demand for high-quality branded accommodation in South Africa's secondary city markets.

"We are at an inflection point. The capital is here, the demand is here, and the development is happening. Africa's hospitality story is no longer one of potential. It is one of progress," concludes Trappler.