South Africa’s hospitality industry is prepared to grow further in the next five years, with most growth in the sector expected to be generated in Cape Town, according to a report released by PwC today.
Nikki Forster, Hospitality Industry Leader for PwC, Southern Africa, said although South Africa’s economy has weakened, the hotel industry in 2014 has benefited from an increase in foreign visitors and rising room rates.
Forster added that the country was facing a plethora of challenges such as load shedding, strikes and xenophobia which could affect the industry.
“The South African hotel market faces a number of challenges, but we are very optimistic in its ability to compete, adapt and succeed, especially as the global economy continues to improve following the recent economic uncertainty,” said Forster.
“Growth in travel and tourism is also expected to boost growth in the accommodation industry across the African continent during the next five years.”
The PwC’s 5th edition of the ‘Hospitality Outlook: 2015 – 2019’, projects that by the year 2019 the overall occupancy rate across all sectors in South Africa will continue to increase, rising to an estimated 58.3 per cent from 54.4 per cent in 2014.
“The hotel occupancy rate reached its highest level in 2014 of 59 per cent since 2008. The hotel occupancy rate is expected to increase to 62 per cent by 2019 but still remain lower than the 68.4 per cent achieved in 2008,” adds Forster.
Five star hotels are expected to achieve a high of 80 per cent occupancy in 2019.
However, one of the most significant recent developments in 2014 and 2015 in the South African tourism industry was the revision of the country’s visa regulations.
“Under the revised regulations tourists to South Africa will have to apply in person for visas to visit South Africa so that biometric data can be reliably collected. In addition, parents and guardians travelling with minors must have an unabridged birth certificate that shows the names of both parents,” adds Forster.
“Although the new regulations are intended to protect South Africa they could have unforeseen consequences for the tourism and hospitality industries.”
“Furthermore, the regulations may be onerous for tourists to comply with. It still remains to be seen as to how they will affect the tourism and hospitality sectors.