IFC, the world’s largest development institution focused exclusively on the private sector, has invested more than $2.5 billion in hotels since 1956. Of the 250 hotel projects IFC has invested in worldwide, about half were located in the poorest developing countries. We currently have 68 active hotel projects in 29 countries with 19 located in Sub-Saharan Africa.
Hotels can have a significantly higher development impact when compared to other industry groups. This impact is evident in direct and indirect jobs, income generation, a variety of taxes, and public good dimensions, such as, encouraging infrastructure development, enhancing the image of a country, and contributing to environmental conservation.
As well as putting money into local economies, IFC’s support for hotel investments can have a catalytic effect on boosting a country’s tourism sector and contributing to its economic diversification and sustainable growth.
In 2007, a World Bank study looked at two large hotels (one four-star and one five-star, both operated by Sun International) in Livingstone, Zambia. The study concluded that the 380 rooms directly employed 840; were responsible for 60,000 tourists coming to Zambia in 2006; provided the government $8 million in direct revenue from taxes, visa fees, and park fees; and spent $4 million in the local economy. That $4 million generated another 400 jobs, of which over 300 went to women, and paid for nearly 1,000 children to attend school.
While the direct benefits from hotels are easier to measure, indirect benefits are key. They include payments made by the hotel to governments for taxes, licenses, and utilities; increased foreign exchange earnings; payments to suppliers of goods and services to the hotel; impact of hotel employee salaries and benefits on the local economy; and non-hotel spending by guests on transport, retail, food, entertainment, and so on which support a wide range of economic activities.
IFC Hotel Investments – Delivering Development Impact in Africa
To learn more about IFC’s hotel investments in Africa, read related brochure: http://on.ifc.org/vLTs1q.
100th Hotel Investment in Africa
IFC recently announced its 100th hotel investment in Africa—a $5.5 million financing package to Opulent (B) Ltd to develop the first DoubleTree by Hilton Hotels in Burundi. Read related press release: http://on.ifc.org/rN5rDf
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