Hospitality Investment in the Afar Region, Ethiopia: Trends, Challenges, and Opportunities

Year 2025, Volume: 11 Issue: 1, 94 - 121, 30.07.2025

Wondemsew Mesafint

https://doi.org/10.26650/jot.2025.10.1.1600275

Abstract

This study explores the landscape of hospitality investment in Ethiopia’s Afar region, a region known for its unique geological and cultural attractions. However, hospitality investment remains underdeveloped, with a significant gap between accommodation supply and demand. This study explores the trends, challenges, and opportunities for hospitality investments in the Afar Region. A concurrent triangulation mixed-methods design was used to provide a comprehensive analysis. Data were collected through questionnaires, interviews, observations, and secondary sources, targeting hotel investors and experts through census and purposive sampling. Quantitative data were analyse descriptively, and qualitative data underwent thematic analysis. Findings reveal that the Afar Region offers substantial opportunities for hotel investment, driven by its attractive tourist sites, strong market demand, favourable government policies, and limited competition. However, challenges include water supply interruptions, inadequate health facilities, high inflation, foreign currency shortages, poor transportation access, inefficient tax and customs processes, raw material shortages, political instability, extreme climate conditions, lack of skilled labour, and land provision issues. Despite these obstacles, the investment climate in Afar remains promising for stakeholders seeking entry into emerging hospitality markets.

Keywords

Hospitality investment , Emerging hospitality markets , Investment challenges , Investment pattern , Afar region

Ethical Statement

This research was conducted in accordance with ethical guidelines and procedures. Ethical approval was not required for this study as it involved surveys and interviews with adult participants and did not involve any clinical or invasive procedures. Informed consent was obtained from all participants, who were fully informed of the purpose of the research and their rights to confidentiality and voluntary participation. Participants' privacy and confidentiality were strictly maintained, and all data was anonymized for analysis. The authors declare no conflicts of interest related to this study. All data collection and reporting were done in accordance with the highest standards of academic integrity

Supporting Institution

This research was supported by the School of Tourism and Hospitality Management, Samara University, Afar, Ethiopia.

Thanks

The author wishes to thank Mr. Ayana Fiseha (Assistant Professor) for his assistance throughout the paper and Mr. Abdu Mohammed, director of Tourism Development at Afar Culture and Tourism Bureau for his cooperation and support during the data collection, particularly the respondents who participated willingly.

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