HOSPITALITY: Hotel Industry Has A Chance To Shine
Recent Western Cape Business News
“Although South Africa’s tourism industry showed some resilience during 2009, attracting 3.6% more tourists and bringing the total number to 9,9 million despite a contracting global economy, the increase in the number of visitors did not outweigh the increase in hotel room supply, resulting in a 13.3% decline in occupancy for South African hotels,” according to Moray Wilson, Tourism, Hospitality and Leisure Leader, at Deloitte Southern Africa.
“Although hosting of the soccer tournament should boost hotel performance for 2010 in the short term, there are at least 10 new hotels or 1 525 rooms expected to open in 2010, and it remains to be seen if improvements in performance will be sustained through to the end of the year. Looking at the experience of a previous host of the tournament, when Germany held the World Cup in June 2006, average revenue per available room (revPAR) went up 35.6% during the month and host cities experienced exceptional revPAR growth of up to 1 000% on key match days. In South Africa, as in the case of Germany, the experience of individual hoteliers over the tournament will differ considerably, and will certainly vary between cities and regions according to the location of match venues, team bases etc.,” he said.
A number of issues have been raised as obstacles to ensuring that the event leaves a favorable long-term legacy for South Africa. Fortunately, the perception of price gouging and the negative effect that this could have on the image of tourism has largely been addressed. Similarly, as regards security concerns, assurances have been given that all the necessary contingency plans are in place, and the tournament now gives the country an opportunity to dispel stereotypes and concentrate on enhancing its global image.
The fact that this major tournament is being hosted on African soil for the first time will increase the profile of the continent, which is already increasingly in the spotlight. GDP growth in Sub-Saharan Africa is forecast to increase 4.3% in 2010, which is considerably more than the developed world and second only to Asia’s predicted 4.7% growth. Demand for natural resources is driving this growth and boosting commodity prices, which benefits many sectors, including the demand for hotel rooms. During 2009, international arrivals to Africa increased 5% while globally the figure declined. On the back of this, international hospitality companies are expanding, particularly in Morocco (51 hotel construction projects), South Africa (37) and Nigeria (17).
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