Cape Town

Tourism Tattler - - BUSINESS & FINANCE - For de­tailed anal­y­sis visit http://hvi.hvs.com/mar­ket/africa/South_Africa_-_Cape_Town

Cape Town saw a small dip in oc­cu­pancy to 66%, but ADR (in US$) re­mained steady, de­spite the weak­en­ing of the Rand against the US$. In lo­cal cur­rency there was a 30% growth in ADR. This rep­re­sents four con­sec­u­tive years of strong per­for­mance, prov­ing the over­sup­ply is fully ab­sorbed. This is fur­ther il­lus­trated by Tsogo Sun Group start­ing con­struc­tion on a 500-room ho­tel com­plex com­pris­ing three brands in Cape Town. There is a planned de­vel­op­ment at the Capeto­nian Ho­tel in Heeren­gracht; and the Gor­geous Ge­orge Ho­tel and Bar de­vel­op­ment be­ing con­structed in St Ge­orges Mall. All these ho­tels are lo­cated in the cen­tral busi­ness dis­trict.

Also ben­e­fit­ting from the cur­rency ex­change rate, the Cape Town ho­tel mar­ket will keep per­form­ing well in 2016. The REVPAR will in­crease by 6.7% thanks to a peak in oc­cu­pancy and a strong rate growth. Val­ues will reach their high­est level at US$167,000. Vic­tim of its own suc­cess, Cape Town will need to deal with an in­creas­ing amount of sup­ply com­ing into the mar­ket in the next few years which might af­fect ho­tels' per­for­mance and value un­til this over­sup­ply is ab­sorbed.

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