Why Misjudging African Tourism Risk Is a Billion-Dollar Mistake

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Africa is entering a period of renewed momentum for tourism and hospitality investment. Demand is rising across multiple markets, air access is expanding, and travel between Africa and the Middle East — now among the most dynamic aviation corridors worldwide — is reshaping how people move across the continent and connect to the rest of the world. According to the International Air Transport Association, Africa is expected to be one of the fastest-growing aviation markets globally over the next two decades, with annual passenger growth nearing 5%.

“The biggest risk in Africa today is not political instability or currency volatility,” said Hamza Farooqui, CEO and founder of Millat Group, a Johannesburg-based private equity firm that invests across real estate, technology, and hospitality. “It is the risk of standing on the sidelines while the most rapidly evolving travel and hospitality market in the world reshapes itself. The opportunity cost of waiting has become far greater than the risks of entering.”

SkiftX sat down with Farooqui to discuss why investor perceptions lag reality and how connectivity, demand, execution, and technology are reshaping Africa’s tourism outlook.

Air Access Is Improving, Even if Infrastructure Isn’t Perfect

Air access across Africa is expanding, even as infrastructure development remains uneven. Governments have accelerated visa openness, particularly for intra-African travel, while airlines are increasing regional and long-haul connectivity through both African and Gulf hubs. According to the Visa Openness Index, 57% of African countries offered e-visas to fellow African travelers in 2025, up from just 17% in 2016, underscoring a clear policy shift toward enabling regional and short-haul movement.

The Middle East-Africa corridor has seen sustained frequency growth and network expansion, carrying tens of millions of passengers each year. Gulf carriers such as Qatar Airways and Etihad have expanded frequency across African cities, using their hubs to connect travelers onward to Asia, Europe, and North America.

Infrastructure gaps remain, particularly at airports, but Farooqui argues that investors often mistake imperfect for unworkable.

“This is not a ‘build it, and they will come’ story,” he said. “The infrastructure is already there. It just needs to be curated properly. Flight networks are improving, demand exists, and the pieces are coming together faster than many people realize.”

Investment Momentum Outpaces Market Assumptions

Despite persistent narratives around risk, hotel development and tourism investment across Africa are accelerating. According to W Hospitality’s 2025 Hotel Development Pipeline Report, the continent recorded its largest-ever pipeline, with 577 hotels and more than 104,000 rooms under development, outpacing growth in several more mature regions. New projects are driven less by mega-developments and more by lifestyle hotels, refurbishments, and local-international partnerships.

Foreign direct investment (FDI) data tells a similar story. While not limited to tourism, a report from the United Nations Conference on Trade and Development (UNCTAD) shows foreign direct investment into Africa rose 75% year over year in 2024, making it the world’s fastest-accelerating FDI destination. That momentum is being supported by demographic growth, urbanization, and rising middle-class travel demand.

“When you actually look at the data — hotel pipelines, capital flows, GDP growth — Africa is outperforming many markets that are considered safer,” Farooqui said. “The disconnect is not performance. It’s an outdated perspective.”

Operator Capability Is the True Differentiator

Africa’s tourism and hospitality upswing is increasingly being driven by execution, not geography. The continent welcomed about 74 million international visitors in 2024, above pre-pandemic levels, and capital is re-engaging across the sector. But demand and development activity only translate into returns when operators can deliver consistent service, reliable maintenance, effective pricing, and experiences that match real demand.

The markets delivering sustained performance are led by operators who understand local consumer behavior, pricing dynamics, staffing realities, and distribution, and who execute consistently. Regional groups such as Azalaï Hotels, CityBlue Hotels, and Newmark Hotels & Reserves have built their positioning around blending international operating standards with deep local knowledge. In safari markets, operators like Wilderness reduce risk through community partnership models and long-term stakeholder alignment. Rather than importing global brands wholesale, these teams adapt systems and service models to local conditions, calibrating product and pricing to what the market will actually support.

“In Africa, the operator matters more than the asset,” Farooqui said. “The difference between success and failure is rarely the location or the capital stack. It’s whether the operator knows how to turn demand into reliable performance, day after day.”

Tech Adoption Is Quietly Reshaping Execution

Technology adoption is also changing how tourism businesses operate across Africa, often in ways that are overlooked in traditional risk assessments. Many operators are leapfrogging legacy systems and using digital tools to improve efficiency, distribution, and guest experience.

According to the Africa Travel and Tourism Association, 85% of African tourism businesses already use or plan to adopt AI tools, and one in four hotel and hospitality businesses use AI in some capacity. These tools are increasingly applied across revenue management, customer service, marketing, and operations, helping businesses scale faster and operate more efficiently despite infrastructure constraints.

For Farooqui, this shift matters because it changes the economics of execution.

“People still talk about Africa as if it needs to build everything from scratch,” he said. “But in many cases, operators are building smarter, not bigger. Digital tools help stretch capital further and streamline operations.”

Reframing Africa as a Growth Engine, Not a Charity Case

One of the biggest barriers to investment, Farooqui argues, is not operational risk but framing. Africa is too often viewed through a development or charity lens rather than as a competitive growth market. Research from Africa No Filter estimates that biased global media coverage inflates borrowing costs for African economies by up to $4.2 billion annually, reinforcing exaggerated risk perceptions that deter investment.

“Treating Africa like a charity case instead of seeing it through a financial lens has real economic consequences,” he said. “It raises the cost of capital, discourages institutional investment, and delays projects that would otherwise create jobs and sustainable returns.”

While safari tourism remains important, capital is increasingly flowing into cities, mixed-use developments, lifestyle hotels, and destinations linked to transport corridors and urban economies.

“Capital is not flowing into Africa because of safaris alone,” Farooqui said. “It’s flowing into cities, infrastructure, and assets that serve a growing, mobile middle class. That reflects a much more mature tourism economy than the stereotypes suggest.”

Execution, Not Instability, Is the New Risk Frontier

Farooqui is clear that Africa is still an emerging market, and that risks remain. But he argues those risks are increasingly about execution rather than instability. He argues Africa supports curated, capital-efficient projects rather than capital-heavy builds, shifting the risk equation.

“Don’t penalize an investment because it’s in Africa,” he said. “Apply the same rigor you would anywhere else. Look at the customer, the product, the capital required, and the partner you’re working with. When you do that, the case becomes very compelling.”

He also cautions against applying outdated asset-light or standardized brand playbooks to African markets without adaptation.

“Africa can’t just be a place to collect fees or plug in old brand standards,” he said. “It has to be a real product that meets today’s traveler. That’s true everywhere in the world, not just here.”

Why the Cost of Waiting Has Grown

Africa’s young population and expanding middle class are creating demand at a time when growth elsewhere is slowing. For Farooqui, the biggest mistake investors can make now is assuming they have unlimited time.

“Africa doesn’t need sympathy or soft expectations,” he said. “It needs serious partners and long-term conviction. Those who engage now aren’t taking a leap of faith. They’re making a rational decision based on where global growth is heading.”

If Farooqui is right, the real test for investors is no longer how they price risk, but how they recognize when legacy risk models no longer apply.

For more information about Millat Global, click here.

This content was created collaboratively by Millat Global and Skift’s branded content studio, SkiftX.