Cape Town is building more hotels today than it has done since the 2010 World Cup. Hotel operators say these are mostly at the upper end of the market, due to the surge in tourism and the conference business — the city 60% of the conferences in South Africa.
New hotels are in the planning stage, under construction or being renovated. Some will open within the next few months, others next year.
BON Hotels CEO Guy Stehlik says there is talk of more than 40 new hotels opening. These include smaller boutique hotels and apartment hotels.
“We are aware of at least 30, and we’re told there are more,” he says. He points to about 15 apartment hotels in the Sea Point and Mouille Point area.
Even the less fashionable parts of the city are attracting hotels. The Rockefeller is established near Harbour Arch, a mixed development on the Foreshore at the confluence of the N1 and N2 highways, and Mama Shelter Residences is due to open late next year in the City Park building (formerly the Christiaan Barnard Memorial Hospital building) on Bree Street in the CBD.
Morea House of the Marriott Autograph Collection opens in Camps Bay at the end of the year, and the Table Bay Hotel is undergoing a R1bn refurbishment. It will reopen under Sun International management.
Acsiopolis 2 is provisionally named after the hotel of the same group in Sandton and is set to be the second-tallest skyscraper in the city, surpassed only by the Portside Tower. A final name has not yet been decided. It has part of the Farber Building, once a motor dealership, built in 1935, in the Waterkant area of the CBD.
The Fedisa building in Buitengracht Street is set to house a hotel of the Rainbow Tourism Group of Zimbabwe. A hotel near the Cape Town stadium is planned for Mouille Point and another is planned to be established at the Cape Town International Airport.
The Ritz in Sea Point, which has had a chequered career, was sold recently to international group Oku Hotels, for between R240m and R300m. It had been mothballed for some time; its lifts had been condemned.
Smaller hotels are also set to open in the northern and southern suburbs. Stehlik says there are at least seven projects in Bellville, Tyger Valley and Durbanville. He says foreign companies are not always the best fit for local hotels, because they require large royalty payments.
There are between 11,000 and 14,000 hotel rooms in Cape Town and about 1,300 new rooms are set to open in the next two years, excluding those in neighbouring towns, among them Paarl, Langebaan and Stellenbosch.
The biggest hotel operators in the city are The Marriott Southern Sun, Radisson and City Lodge. The city is attracting the biggest share of hotel investment in South Africa, apart from Club Med on the KwaZulu-Natal north coast and some activity in Rosebank in Joburg.
The city is regularly ranked as one of the best travel destinations globally. Tourism supports more than 106,000 jobs, roughly 6.9% of Cape Town’s total employment figure
According to HTI Consulting, which researches the hospitality industry, only 22% of Cape Town’s hotel supply is internationally branded. Last year it had an increase of 7% in air arrivals, with 5.2-million people. International arrivals showed a 119% growth over 2019.
HTI’s Wayne Troughton says there has not been much additional hotel supply in Cape Town in the past five years other than the Sky Hotel, the Rockefeller Hotel, the Onyx and more recently the Canopy Hilton, which opened in March. New developments are likely to be staggered over the next four to five years.
The market has achieved a year-to-date July average occupancy of 67.2% across the city, according to STR, which measures hotel performance globally. Rate growth has outpaced inflation, and demand continues to grow, driven by increased access and the international “value for money” proposition of Cape Town, says Troughton.
Cape Town’s hotel sector performance is well above pre-pandemic benchmarks, though Troughton points out it’s hard to get above a certain level because of seasonality, as visits to the city decline over winter.
Last year about 2.4-million overnight tourists visited Cape Town. The city has benefited from more inward direct flights and it is regularly ranked as one of the best travel destinations globally. Tourism supports more than 106,000 jobs, roughly 6.9% of Cape Town’s total employment figure.
The hotel industry on the African continent as a whole has also experienced growth, with 577 new hotels and resorts under construction, adding more than 104,000 rooms. This 13.3% increase outpaces global growth, with sub-Saharan Africa driving much of the momentum.
Daniel Trappler of the Radisson Hotel Group says there are clear market signals across sub-Saharan Africa indicating expansion opportunities, “particularly with the sector’s potential to generate $168bn in revenue and create more than 18-million jobs by 2033”.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.