In February 2017, South Africa's hotels reported a 7.8% year-over-year RevPAR increase. The country also reported 7.6% ADR growth and nearly flat occupancy (+0.2%).
CAPE TOWN, South Africa—Hotels in South Africa recorded a 7.8% year-over-year increase in revenue per available room (RevPAR) in February 2017, according to data from STR.
The country’s February performance was largely driven by 7.6% growth in average daily rate (ADR), while occupancy was up 0.2%. This followed an 11.4% year-over-year increase in RevPAR for 2016, and a 6.3% rise in January 2017, which were both attributed to ADR growth.
Ahead of STR’s presentation in Cape Town on Wednesday 22 March, Maryke Dreyer, STR’s business development manager for South Africa, notes that weakened currency has resulted in significant performance growth for the country’s hotels.
“With the devaluation of the rand, there have been major boosts in both international and domestic demand,” Dreyer said. “While the favourable exchange rate has made the market more attractive for foreign visitors, hotels have benefited from the opposite as well, with more South African residents travelling domestically as international destinations have become less affordable. Cape Town, the top destination in South Africa, is performing exceptionally well, with a 20.4% increase in RevPAR for 2016.”
In terms of inbound tourism, arrivals to South Africa increased considerably in 2016, according to Tourism Economics, STR’s forecast partner. Compared with 2015, arrivals were up 11.6% from the Middle East and Africa, 23.8% from Asia, 15.3% from Europe and 18.4% North America.
Dreyer also notes that hotel performance should be further helped by a lack of new supply entering the market. In Cape Town for example, there are only 10 properties currently in the pipeline. However, it is not unusual to see limited supply growth in South Africa given that the market has just recently started to absorb the inventory added ahead of the 2010 FIFA World Cup.
February 2017 performance for select South African markets:
- Occupancy: +2.0 to 86.6%
- ADR: +12.3% to ZAR2,313.25
- RevPAR: +14.6% to ZAR2,002.52
- Occupancy: +0.2% to 68.4%
- ADR: +1.8% to ZAR1,335.20
- RevPAR: +1.9% to ZAR913.11
- Occupancy: +8.3% to 65.2%
- ADR: +4.1% to ZAR864.33
- RevPAR: +12.7% to ZAR563.52
“South Africa is a major foothold for Africa’s hotel industry,” said Philip Wooller, STR’s Middle East and Africa area director. “We expect this performance to continue through the rest of 2017, especially in Cape Town, given that accessibility to the market is improving with more flights available from several international markets.”
Along with Dreyer, Wooller will be at STR’s Cape Town event on 22 March to discuss hotel performance trends in the Middle East and Africa. For more information about the event, please contact MDreyer@STR.com.
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