SA’s hotel market is rebounding, with revenue per available room (RevPAR) climbing nearly 10% to R995 and occupancy reaching 58.6%.
Radisson Hotel Group is riding that wave, planning to double its South African portfolio to 26 properties by 2030 — a move that signals both confidence in the sector’s recovery and appetite for long-term growth.
Cape Town: old market, new angles
The group already operates four properties in the Mother City, but Daniel Trappler, senior director of Development for Southern and Eastern Africa, sees plenty of headroom. Five-star hotels in the Western Cape have posted an 8.3% RevPAR upswing, a gap Radisson Blu, the group’s largest upper upscale brand globally, is positioned to exploit.
“Europe remains Cape Town’s biggest source market,” he says. “With more than 200 Radisson Blu properties across the continent, brand recognition gives us a clear advantage.”
Additional luxury demand could be met with Radisson Collection hotels in Clifton or Camps Bay, while Park Inn by Radisson would cater for upper midscale travellers. “It’s about having the right flag in the right location,” Trappler says. “Cape Town’s diversity allows us to layer luxury, lifestyle and upper midscale products without cannibalising demand.”
Corporate travel also remains a draw. Venue shortages are opening up new opportunities in the MICE (meetings, incentives, conferences and exhibitions) market.
Secondary cities: where the gaps are
The sharper growth story lies outside the metros. Supply-demand mismatches in secondary cities create opportunities where competitors have been slow to move.
In the Western Cape, Tyger Valley is seen as ripe for a 150-room property, with residential, academic, corporate and medical clusters currently underserved. George is another candidate, supported by infrastructure investment and a fast-growing commuter base. Within the Winelands corridor, Radisson Hotel Group is eyeing smaller-scale builds in Stellenbosch, Franschhoek and Paarl, where new residential development is reshaping demand.
The Eastern Cape is outperforming the rest of the country, making it an attractive option. Gqeberha, for example, posted occupancy rates of 68% — a number that points to undersupply rather than low demand.
KwaZulu-Natal is more complex. Luxury hotels face headwinds, but serviced apartments and resort-style properties in Sibaya and Umhlanga Ridge are on the cards. The Drakensberg, with limited formal branded accommodation, represents a “white space” opportunity. Sitting between Johannesburg and Durban, the area is ideally situated for the domestic leisure segment. Trappler argues that a 120-room Radisson Blu could redefine the region’s market positioning.
Even Gauteng still has gaps. Midrand lacks lifestyle-oriented hotels despite its corporate density, while a Radisson RED could capture a younger demographic. At the top end, an 80-room Radisson Collection would serve unmet luxury demand.
The funding puzzle
For all the optimism, funding remains a drag on hotel development in SA. Elsewhere on the continent, pension funds often back projects with full equity. Locally, developers must assemble complex packages involving commercial banks, development finance institutions, and private investors, as well as sectional title schemes that bring in various individual investors.
“Banks prefer predictable lease income over variable hotel revenues,” says Trappler. The group has worked around this by offering profit guarantees and feasibility structures designed to meet credit committees’ concerns. Banks need to learn that such structures give them more upside while still protecting their downside risk. It’s a more aggressive stance than most competitors take, but Radisson sees it as a necessary tool to unlock growth and create employment in SA.
Strategic outlook
Radisson Hotel Group’s ambitious plans reflect confidence in SA tourism’s trajectory. Combining established market development with secondary city opportunities and innovative funding solutions, the strategy positions the group to set new accommodation standards while capitalising on underserved destinations.
The expansion timeline may be aggressive, but with tourism showing its strongest fundamentals in years, the bet on doubling down is calculated rather than cavalier. Success will depend on execution, but the mathematics, from rising RevPAR to untapped secondary markets, suggest the opportunity is real.
This article was sponsored by Radisson Hotel Group.
