Demand for midscale and budget hotels is continuing to exceed supply in Casablanca, Morocco, according to a new report by global hotel consultancy HVS.

Four and five-star hotels make up over 50 per cent of the total room capacity, leaving the economy segment – particularly branded budget hotels – under-represented.

From 2006-2013 hotel supply in Casablanca grew at a rate of 6.6 per cent with both room and bed capacity expanding at a similar pace yet demand for one and three-star properties grew by over 15 per cent.

“The three-star segment in Casablanca has seen the fastest growth in terms of rooms capacity, of almost 12 per cent, while the two-star segment makes up just under seven per cent of the total room capacity,” said report co-author Veronica Waldthausen, an associate at HVS London.

The situation is likely to improve somewhat as new supply comes on-stream, but there is still significant development opportunity in the economy sector in Casablanca,” Waldthausen added.

In 2010 Casablanca experienced a boom in tourism, but things stalled in 2011 as the Arab Spring affected the image of Northern Africa. Even so, Casablanca’s reputation as a financial and economic hub recovered at a faster pace than other destinations in Morocco.

“Overall the outlook for Casablanca remains positive and growth in most hotel segments is expected,” said report co-author Sophie Perret, director of HVS London. “It is one of the most established countries in North Africa, and as such the hotel sector should be able to reap the benefits from its stable image and close proximity to Europe.”

Investment in the city’s infrastructure – as part of the country’s Vision 2020 project to double tourism levels to 16-20 million by 2020 – includes the construction of Casanearshore Park, hotel and office space for 100 multinational companies.

The 350km (217 miles) high-speed rail line from Casablanca to Tangier, the first of its kind in Africa, is expected to be up and running next year, while a US$500m (€368m, £294m) development of the waterfront – to include high-end retail space, a business centre, hotels and luxury apartments – is also expected to attract visitors.

HVS also states that conference business has increased due to the opening of the 5,000-delegate Palais des Congres.