Hospitality Investment in Semera City, Afar Region: Trends, Challenges, and Opportunities

Abstract

Afar Region is endowed with diverse and unique tourism resources with improved tourist flow, but in the capital Semera City, there is an imbalance between supply and demand for accommodation. Hence, the main objective of this study was to assess trends, challenges, and opportunities for hospitality investment in Semera City. The study employed a descriptive research design with a concurrent mixed research approach. The study used questionnaires, key informant interviews, observation, and secondary data collection instruments. Comprehensive and purposive sampling was used to select hotel investors and experts respectively. The study applied descriptive statistical analysis for quantitative data mainly frequencies, percentages, and mean, and thematic analysis for qualitative data. The findings of the study revealed that Semera City offers significant opportunities for hotel investment due to extraordinary tourist attractions with improved tourist flow in the Afar Region, the import policy of the government, strong market demand for accommodation, recommended occupancy rate for hotel establishment, and little competition among existing hotels and positive hotel market trend. However, the study has identified the factors that hinder hotel investment activities which include interruption of water supply, shortage of health facility, high inflation, unavailability of foreign currency, unavailable transportation access, poor tax administration and customs procedure, lack of raw materials supply, political instability of the country, climate conditions of the city, lack of skilled manpower and land provision, were among the challenging factors of hotel investment in Semera City.

Keywords: Hospitality Investment; Challenges; Opportunities; Trends; Afar

DOI: 10.7176/JTHS/69-01

Publication date: March 30^th 2026