But this view only holds if the bigger picture is ignored.
"Our requirement is that developments outside South Africa's borders must still be of benefit to South Africa's economy. In the tourism sector that happens mostly through exporting South African goods and services, and a lot of the materials and professional services required in the rest of Africa are sourced from South Africa," says Christine Engelbrecht, head of the IDC's tourism unit.
"We believe there are opportunities for the development of business hotels in many of the countries that have high economic growth because their natural resources are being developed. If you've travelled into the rest of Africa, you'll know that although you pay top dollar, the facilities are not of the quality we are used to here."
Engelbrecht says the IDC's mandate had initially included only South African Development Community (SADC) countries, but was expanded to the rest of the continent more than 10 years ago. The focus on industrial development in neighbouring countries does remain, though, and the IDC pays special attention to developing regional supply chains so that resource-beneficiation happens in the SADC and adds value to the development community's regional and national economies.
In the tourism sector, this is achieved primarily through importing professional services and construction materials, but food, beverages and basic services are sourced locally to support local job creation and economic benefit.
The tourism unit's proactive approach is partly in response to the development and regulatory delays that are common in projects in other economies. This is now partially offset by getting involved from the start and being able to choose partners and suppliers, Engelbrecht says.
"Similar to our approach in South Africa, all these projects have strong local ownership and empowerment requirements," she says.
A good example of how the IDC has developed foreign properties while supporting local enterprise is Wilderness Holdings, a local business that has expanded into SADC, specifically in Botswana.
The company's expansion into the lucrative wildlife sector was facilitated by the IDC, so that the business now owns 60 luxury game lodges. The bulk of these lodges are in the Okavango Delta in Botswana, but the company also has lodges in Namibia, Zambia, Zimbabwe, the Seychelles, Tanzania, Kenya and South Africa and employs 1 500 people across the SADC region.
Part of the IDC funding was used to provide a so-called "mid-market experience": holidays that are affordable to SADC-based tourists. International tourists are also catered for with luxury products that cost an average of US$1 200 a person a night.
Africa is waiting
The opportunities presented by such ventures and the prospects for developing affordable accommodation, specifically for the business traveller, were enumerated in a recent report by the IDC's research unit. Twelve markets in East and West Africa (Burundi, Ethiopia, Kenya, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Côte d'Ivoire, Ghana, Nigeria and Togo) were investigated to identify gaps that could be filled by IDC-funded projects. Several of these countries have recorded rapid economic growth and have started to attract significant investment, both domestic and foreign.
The report highlights the usual litany of challenges experienced in Africa: corruption, poor image and negative perceptions, inadequate infrastructure and high costs for air transport. The tourism sector itself in these countries is also hampered by high investment and operating costs, a shortage of skilled and experienced workers, excessively high room rates relative to the service offered, as well as intensifying competition in certain areas and insufficient competition in others.
One of the key markets investigated by the IDC is Nigeria. This country of 200-million people is the region's economic powerhouse, but is still playing catch-up on infrastructure development, even in its major centres. International tourist arrivals in Nigeria increased to almost 1.2-million in 2009 and the number of business tourists grew to more than 725 000.
The research indicates that Nigeria's hospitality industry has been expanding mostly in response to the growing number of foreign business travellers, and that domestic travel is ticking up.
The expansion of facilities in the economic capital of Lagos, which is expected to exceed 5 000 rooms on the back of current development, has already reduced occupancy levels, which is expected to affect room rates as competition intensifies. Room occupancy levels in the city's hotels had reportedly grown from 76% in 2005 to around 86% in 2008, but fell to around 60% last year owing to increased capacity.
Based on the intelligence from this report, the IDC is therefore looking to invest in projects that provide more affordable business accommodation, which it believes is possible in both Lagos and Abuja through rebranding, expanding and upgrading existing facilities.
Rapidly developing areas, such as the suburb of Ikeja, north of Lagos, are seen as potential investment destinations given that "Nigeria possibly exhibits the greatest potential in sub-Saharan Africa in terms of new hotel development in secondary cities," the report says.
On the other side of the continent, Ethiopia is seen as a market with tourism potential now that the country is emerging from the years of internal strife. This optimism is based on the 13.6% average annual growth in tourist arrivals between 2001 and 2009 to 412 341 tourists, coupled with the relatively small number of hotels. The country has a total of 50 hotels in the five-, four- and three-star categories, and few outside of the capital, Addis Ababa.
Owing to these supply constraints, the city has very high room occupancy rates, ranging from around 80% in the upper segment and just over 61% in the mid-range establishments to almost 90% in the low-end segment, which serves predominantly the domestic business market.
"Such high occupancy rates point towards a need for an expanded supply of quality hotel accommodation in various parts of the country in order to improve the competitiveness of its tourism offer," state the authors.