South Africa’s hospitality sector set to grow further – PwC report

South Africa’s hospitality sector set to grow further – PwC report

Despite South Africa’s economy facing difficulties, the hospitality sector is set for further growth in the next five years in the wake of a number of inbound travellers into the African continent, a new PricewaterhouseCoopers (PwC) report said this week.

“Although South Africa’s economy has weakened, growth in international travel and tourism and rising room rates have bolstered the hospitality sector,” Nikki Forster, PwC hospitality and gaming leader said in a statement.

The report, now in its fourth edition, is titled ‘Hospitality Outlook: 2014-2018’.

By the year 2018 the overall occupancy rate across all sectors  in South Africa will increase, rising to an estimated 58.4%. Total room revenue is expected to reach R28.7 billion in 2018, a 10.7% compound annual increase from 2013, the report said.

“Occupancy rates are expected to increase for hotels over the next five years, overtaking guest houses, bush lodges and guest farms to again become the leading category,” Forster explained.
Occupancy rates for hotels are projected to increase from 58.9% in 2013 to 71.1% in 2018, according to the report.

The report, which includes for the first time a detailed analysis of the cruise industry in South Africa, also features information about hotel accommodation in Nigeria, Mauritius and Kenya.

Accommodation sectors in South Africa consist of hotels, guest houses and guest farms, game lodges, caravan sites, camping sites and other overnight accommodation, PwC said.

“One of the most significant developments in 2013 in the South African hospitality industry was the rise in average room rates, which increased 8.4%, well above the 5.9% rate of inflation,”  Forster pointed out.

Despite the recent economic uncertainty, the total number of foreign overnight visitors to South Africa rose 3.9% in 2013, down from the 10.2% increase in 2012, but still reflecting continued growth in foreign travel to South Africa.

Foreign travel to South Africa was boosted in early 2013 by the African Cup of Nations football tournament and in December following the death of the late President Nelson Mandela, which led to an increase in the number of visitors to Robben Island where he spent many years in jail.

“The continued depreciation of the Rand is also credited with contributing to the growth in foreign tourism by making South Africa a less expensive country to visit,” Forster said.

“South Africans are also tightening their belts when it comes to luxury holidays abroad and turning to local travel as an alternative.”

The total number of travellers in South Africa is projected to reach 17.6 million, the report said.

Photo: A room in the Marataba Lodge, South Africa. Credit: Inthralld.com

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