Despite steady growth in Africa’s hospitality and tourism sector, hotel restaurants across the continent are struggling to achieve strong profitability. Industry analysts point to rising operational costs, shifts in consumer spending, and management practices as the main factors hindering faster financial growth.
While hotels in major cities continue to attract international visitors and business travelers, many of their in-house restaurants are finding it difficult to sustain profit margins. A key challenge lies in high operating expenses. In countries such as Nigeria, energy costs remain a major burden, with frequent power shortages forcing hotels and restaurants to rely on expensive alternative sources such as diesel generators.
Consumer behavior also plays a role. Many local patrons prefer standalone restaurants, street food outlets, or fast-casual dining options, which are often more affordable than hotel-based dining. This limits the customer base for hotel restaurants, making them more dependent on hotel guests rather than the wider public.
Experts further note that management approaches within the sector often fail to adapt to evolving market trends. Issues such as outdated menu planning, limited use of local ingredients, and rigid pricing models reduce competitiveness in a market where diners seek both value and variety.
Hospitality consultants suggest that hotel restaurants could improve performance by adopting more flexible strategies, such as creating partnerships with local suppliers to cut costs, tailoring menus to regional tastes, and designing promotions that attract non-hotel guests.
While the broader hospitality industry in Africa is on an upward trajectory, with new hotel developments and international chains entering the market, the profitability of their food and beverage outlets remains under pressure. Industry watchers say addressing these operational and structural issues will be critical if hotel restaurants are to benefit fully from the continent’s growing tourism and business travel sectors.
