HOSPITALITY: Turning The Tables At Luxury Hotel
Recent Western Cape Business News
THE extent to which the Cape Town luxury hotel market is over-traded in the wake of the Soccer World Cup was evident from Sun International’s interim results to end December 2010.
The group’s flagship Table Bay hotel put in a disappointing half-year performance with an 18% increase in average room rate (to R2 230) offset by a worrying 10 percentage points decline in room occupancies to 44%.
This saw the Table Bay’s half-year revenues of R79 million eroded to just R13 million at gross profit level and to break even at operating profit level.
The decline in occupancies was mainly due to a decline in demand from the United States and UK as well as increased rooms inventory in Cape Town.
The Quantum Group, which owns the new 15-on-Orange five star hotel, are expected to release its operating results this month.
Quantum’s performance might confirm the worst fears around an over-supply of luxury accommodation in the upmarket hotel segment in Cape Town.
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