S.Africa’s hospitality industry on the rise - CNBC Africa

S.Africa’s hospitality industry on the rise

Southern Africa

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The Sun City Hotel is one of many luxurious hotels in South Africa. PHOTO: Kuoni

This is according to Pricewaterhouse Coopers’ 4th edition of the hospitality outlook from 2014 to 2018, which focuses on South Africa’s accommodation industry.

“We did a comparison this year of what we said previously, and in all factors apart from one, we were actually very close. The one where we were a little bit off was occupancy. We’d predicted 61 per cent for 2013, it actually came in at 59 per cent. So it was pretty close but the trend was very much on [board],” Nikki Foster, South African hospitality and gaming sector leader for Pricewaterhouse Coopers (PwC), told CNBC Africa.

Foster added that rooms’ revenue however increased by 14 per cent, which is significantly above inflation. Key growth areas PwC had observed were in occupancy and room rates.

Foster explained that overnight visitors coming to South Africa on their way to business-related deals elsewhere were a sector within the industry that needed to be looked at more carefully, as South Africa has become a stepping stone for this particular type of travel.

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Equally, the country has a vast number of travellers visiting for holiday purposes, and the weak rand has helped boost these particular figures.

(WATCH VIDEO: Hotel chains spread across sub-Saharan Africa)

“I think it’s helped in two ways: people coming in to South Africa now find it considerably cheaper compared with prior years. It’s a long-term decision. You don’t make a decision to do a long-haul trip to South Africa overnight unless it’s perhaps for business purposes,” Foster explained.

“The depreciation of the rand has been in place for sufficient time now that we’re seeing the impact. It is now cheaper to go on holiday to South Africa.”

(READ MORE: Marriott to open 30 new hotels in S.Africa by 2020)

On the other hand, it’s more expensive for South Africans to travel overseas, which could be changing their decision plan to travel domestically instead.

In other parts of the continent, hospitality figures have also varied in accordance with current economic and political climates.

 In Kenya, for example, insecurity has played an important role particularly within its hotel industry.

“Bookings [in Kenya] were down five per cent during 2013, and if you think about the lead time, we certainly expect it to be showing further declines in 2014 in terms of numbers and in terms of rate, in fact, across the whole industry.”

Nigeria faces the same insecurity issue, but with different results. Because majority of travel to Nigeria is more business than holiday-related, Foster believes that Nigeria benefits from a geographical separation, with Lagos remaining the business hub, away from the terrorist attacks occurring north of the country.

“I think Lagos is still considered pretty safe, and the drive to go there as a corporate probably is stronger than the risk of terrorism, as opposed to the Kenya situation where it’s all in the same place,” said Foster. 

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