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Johannesburg - After somewhat of a lull following the World Cup soccer tournament, the occupancy levels of Cape Town’s five-star hotels rose sharply in November.
Despite the pressure of the stronger rand on Cape hotels because they were more dependent on international visitors than, for example, Gauteng or Durban, occupancy rates of the Cape Grace and the One & Only hotels in the V&A Waterfront were 45% up since last November.
Pam Golding Hospitality chief executive Joop Demes said these hotels’ occupancy rates were in the upper 80% for the month – a remarkable performance in an economy still in the early stages of recovery.
In the case of the Cape Grace, occupancy was higher than any month since November 2002.
Demes said 15 on Orange in Cape Town and the Crystal Towers Hotel in Century City – two relative newcomers to the five-star market – achieved acceptable occupancies in the upper 50% in November.
As new hotels usually find their niche in the market only after three years, this high occupancy was noteworthy. He also mentioned that the new hotels had not necessarily taken market share from the others.
In the same month the occupancy of the Radisson Blu was well above 80%, while that of the Westin Grand was close to 80% – much as it had been in November last year.
Given these statistics, he estimated that the demand for five-star rooms in Cape Town this November had increased by at least 17 000 bed nights, compared with November 2009. This, he said, was a direct consequence of the successful World Cup soccer tournament.
Over the past ten years the number of five-star hotel rooms in Cape Town had risen from 2 008 to 3 395 – a 69% increase.
According to Demes this was largely thanks to lively economic growth and not only to the World Cup.
The coming season would not see 100% occupancy levels, but prospects seemed considerably better than for the same period last year, Demes believed.
Despite the improved occupancies, he expected that there could nonetheless be certain casualties along the way, especially new hotels in Cape Town and Johannesburg that were highly leveraged and could find themselves in financial difficulties if interest rates started to rise.
But no danger signals were evident and South Africa would have far fewer casualties than the US and Europe.
Demes said that in the US 15% of all hotels were struggling to meet their financial obligations and the figure was expected possibly to rise to 30% in 2012.
Maarten van den Nieuwenhuijsen, regional director of the Rezidor Group, said the five-star hotel market in Sandton and its environs remained tricky, particularly because several new hotels had opened their doors in the past year.
This market’s occupancy rate rose to 60.3% in November from 46.5% in October, but the average income per available room (revPAR) in Sandton and its surroundings was still below that of last year. In November the revPAR had been 16% down year on year and in October 20% down on the previous October. Van den Nieuwenhuijsen believed it would improve next year.
Kamil Abdul-Karrim, the managing director of Pam Golding Tourism and Hospitality Consulting, said in the three- and four-star hotel market in the Greater Johannesburg area tariffs were still lower year on year, but occupancies in November and the first week of December had improved.
- Sake24
For business news in Afrikaans, go to Sake24.com.
