South African hotel sector looking firmer after a few slow months - Deloitte Reports

5th Jan 2004

While statistics from the HotelBenchmark Survey by Deloitte indicate a continued slow down in the South African hotel sector compared to the same period last year, players in the industry have started to breathe a sigh of relief with November occupancies appearing slightly firmer.

International events such as the, ‘46664 Nelson Mandela Aids Awareness Concert’ held in Cape Town on the 29 November 2003, again highlight Cape Town’s offering to both domestic and international tourists. The Arabella Sheraton Grand Hotel reportedly catered for the bulk of the performers, which will no doubt have provided a welcome boost to the hotel in it’s fourth month of operation.

With regard to the October slow down, only the 3-star Cape Town sector continued to shine with occupancy increasing by 3.6 percent compared to October 2002. The positive revPAR position for the country as a whole, which is up 7.5 percent year-to-October compared to last year, illustrates the impact of the extraordinary growth of the early part of 2003.

The Travel Industry Association of America’s quarterly Traveller Sentiment Index, a survey that took place from 16 - 26 October, also continued its steady decline in the fourth quarter 2003 and stands at its lowest point for the year. This indicates that American consumers were more negative about their financial ability to travel during this quarter, which correlates with the South African hotel sector’s experience of a decline in inbound tourism throughout the month of October.

On a more positive note, it is pleasing to see that certain niches in the inbound tourism sector are seeing ongoing growth. Andrew Russell of Cape Africa Tours, a company that specialises in catering for inbound sports touring groups, noted: “We have witnessed sustained growth in 2003 from a variety of inbound sports groups - particularly UK schools. By providing a service that meets the needs of the sports groups and their supporters - often parents - we are experiencing consistent new business growth.”


Meanwhile, the debate around the approach to maintaining rates continues. A review of rates in US$ dollar terms show that the increases of the last two years have only managed to recoup the loss in rates of previous years.


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