Four-star hotel rooms to increase
Form bulk of new lodgings
AN ADDITIONAL 2 900 hotel rooms were expected to be added in the South African market over the next five years, according to PwC.
Pietro Calicchio, the industry leader for hospitality and gaming for PwC Southern Africa, said yesterday that most of the hotel openings scheduled for the coming years in South Africa would be four-star hotels.
Calicchio said this would lead to a projected 2.4 percent compound annual increase in available four-star rooms over the next five years, which represented 76 percent of the total increase in available rooms for all hotels in South Africa in this period.
He was speaking at the release of the PwC’s 2018 Hotels Outlook 2018-2022 report.
Four-star hotels were expected to account for the bulk of the new hotels in South Africa despite five-star hotels achieving the highest increase in average daily rate and occupancies last year.
The report said the five-star market achieved an 8.8 percent increase in the daily rate last year. Calicchio said this was high considering the average 3.9 percent increase in the daily rate last year for the overall hotel sector.
Five-star hotels achieved occupancies of 79 percent last year. Calicchio attributed the strong performance of the fivestar hotel market to the limited numbers of this grade of hotel.
He said most new hotels that opened in South Africa last year were four-star hotels, leading to a 1.8 percent increase in available four-star rooms, the first rise since 2013.
“The three-star and fourstar market have 67 percent of the total market, with the five-star market accounting for 16 percent. Three-star hotels accounted for 31 percent of total hotel room revenue in 2017,” he said.
The PwC report said South African hotel room revenue was expected to grow to R21.8 billion in 2022, a 5.6 percent compounded annual growth from R16.6bn last year.
It said international visitor numbers to South Africa grew 2.4 percent last year, with the number of foreign visitors and domestic tourists projected to increase by 5.3 percent this year.
There was a 7.2 percent increase in visitors from non-African countries last year, with the largest growth recorded from Latin America with a 59.3 percent gain.
Travellers
The total number of travellers to South Africa was expected to reach 19.5 million by 2022 from the 16 million last year.
Calicchio said the number of Chinese visitors to South Africa surprisingly dropped by 17 percent last year after increasing by 38 percent in 2016.
He said the number of travellers from India rose by 2.7 percent last year, which was well below the 21.7 percent increase recorded in 2016.
Of non-African countries, the UK was still the largest source of visitors to South Africa at 447 901 last year, which contributed to the overall growth of 7.2 percent in visitors from non-African countries last year.
Overall hotel room revenue in South Africa rose 4.6 percent to R16.6bn last year, average room rates were slightly higher but occupancies were flat.
The report said tourism contributed 9 percent to South Africa’s gross domestic product last year, with domestic travel, helped by an improving economy, showing the largest increase since 2014 by rising by 4.2 percent.
Calicchio said Cape Town remained the gem of South Africa’s hotel sector despite the water shortage crisis knocking the city’s hospitality sector.
He said the growth in guest nights in Cape Town dropped by 1 percent last year after growing by more than 7 percent in 2016.
However, the average daily rate increased by 7 percent last year, which was much higher than the average for the total market, although slower than the 11 percent growth in 2016.