NEWS

Africa’s growing business events industry

The global business events industry is thriving. In 2023, it was valued at an estimated $523.3 billion (R9.7 trillion) and is projected to reach $1,384.9 billion (R25.5 trillion) by 2032, with an impressive compound annual growth rate (CAGR) of 11.4 per cent from 2023 to 2032.

Africa shows promising growth. Africa’s business events industry was valued at an estimated $16.6 billion (R295 billion) in 2023 and is projected to reach an estimated $65.6 billion (R1.2 trillion) by 2032, at a compound annual growth rate of 16.8 per cent. South Africa’s business events industry was valued at $6.6 billion (R121.8 billion) in 2023 and is expected to reach $25.9 billion (R477.9 billion) by 2032, according to an Allied Market research report.

Africa’s business events industry is poised for exponential growth, and the continent’s growth rate is foreseen to outperform other regions such as the Americas, Europe, and the Asia-Pacific.

Inflation and high operational costs hindering growth

Despite the promising outlook, Africa’s business events industry faces significant barriers, with inflation being a key challenge. The pandemic exacerbated inflationary pressures across the continent, impacting supply chains, devaluing local currencies, and increasing import costs due to global trade disruptions.

Governments’ responses, to curtail inflation, included fiscal stimulus measures and borrowing. In 2023, Africa’s inflation rate stood at 18.4 per cent, much higher than the global average of 6.8 per cent. This rising inflation has led to increased operational costs in the business events sector, with expenses for lodging, transportation, catering, and convention services increasing by 15 per cent. These rising costs not only reduce Africa’s competitiveness in attracting international events, but also make it more expensive for delegates to attend.

Inflation and high operational costs are significant challenges to the growth of Africa’s business events industry, threatening its competitiveness.

Additionally, the highly competitive environment for securing business events has led to enduring cost-consciousness among event organisers. The need for innovative strategies to cut costs, such as incorporating group fares into meeting programmes, has become crucial.

Leveraging experiential travel and industry growth to overcome challenges

Despite these challenges, several factors are driving the continued growth of Africa’s business events sector. The rise of experiential travel has created demand for unique and immersive business events experiences, boosting the popularity of boutique hotels, eco-lodges, and themed accommodations. Changes in lifestyle, increased tourism promotion, and improved transport facilities are all expected to fuel further growth.

The meetings segment dominates Africa’s business events market, holding 60.4 per cent of the market share, followed by conventions (19.5 per cent) and incentives (12.7 per cent). The incentives market, which is experiencing the highest growth rate, at 17.2 per cent, reflects the growing trend toward rewarding employees and clients through immersive travel experiences.

Additionally, sectors such as information technology and telecommunications (25.7 per cent), agriculture and food (19.8 per cent), and finance (18.5 per cent) are key contributors to the business events industry.

South Africa’s stronghold in the African business events market is notable, with the country attracting 70.8 per cent of its events from the international segment. Its leading sectors –information technology, agriculture, finance, and hospitality – ensure continued growth, even amid inflationary pressures. South Africa’s business events industry is set to benefit from the projected CAGR of 16-17 per cent for both its international and domestic segments through 2032. By capitalising on the rise of experiential travel, industry diversification, and sectoral growth, Africa’s business events industry can overcome inflationary challenges and maintain its strong growth trajectory.