Nick Hedley
SOUTH Africa's hotel operators are upbeat about the coming year after a rough patch characterised by a combination of an oversupply of accommodation and lower demand from leisure and business travellers.
The industry has seen a slowdown in new developments since the 2010 Fifa World Cup‚ which will help improve overall occupancy rates from a low of 53% in 2011‚ compared to 72% in 2007.
Professional services firm PwC said last year that it expected occupancy rates to pick up during 2012 and to improve to 62% in 2016‚ helped by a slowdown in room availability growth‚ as well as an improved economy and gains in tourism and travel.
Protea Hospitality Group chief executive Arthur Gillis says trading conditions were improving.
Protea Hospitality is adding a new Protea Hotel Fire & Ice in Pretoria‚ and Gillis says the group has "a number of hotels planned for SA – most of them have not been announced. They are in the final throes of negotiations".
The group‚ which caters primarily for business travellers‚ is also on a R1-billion expansion drive into Africa.
Gillis says the improvement in trading conditions is due to an improved business and trade environment as well as a slowdown in the quantity of hotels built since 2010. Some of older, weaker hotels "are disappearing out of the system".
Andrew McLachlan‚ Rezidor Hotel Group's vice-president of business development for Africa and Indian Ocean Islands‚ says trading conditions in the rest of Africa "continue to be strong"‚ while in South Africa every quarter of 2012 showed improvement.
"If it continues the way it is now, then the industry is looking positive‚" he said.
While Rezidor is expanding rapidly in the rest of Africa with 27 hotels currently under development‚ opportunities for growth in South Africa will come from incorporating existing hotels into the Rezidor brand‚ he says.
Tsogo Sun chief executive Marcel von Aulock says the hospitality industry "continues to reflect recovery from prior periods".
The listed hotel and casino operator reported an increase in overall revenue for its South African hotels division of 17% for the six months which ended in September compared to the previous period.
Von Aulock says the group remains "reasonably optimistic in our outlook".
Listed hotel group City Lodge's chief executive Clifford Ross says the outlook for 2013 "is very difficult to predict", but that trading conditions are showing signs of "very gradual improvement".
City Lodge is looking to the rest of Africa for growth opportunities and expects its 106-room Town Lodge Gaborone to be fully open in February next year.
Group chief executive of Peermont Anthony Puttergill says Peermont's forward occupancy forecast has improved over the past year‚ following "an excellent year with all South African hotels posting increases in occupancies and revenues compared to 2011".
"The generally high occupancy rates that we are currently experiencing bodes well for the new year, but it will be very difficult to achieve significant further improvement without adding additional hotel room capacity‚ which is under consideration‚" Puttergill says.
He adds that while it may be a challenge to sustain the group's recent record earnings growth‚ "we are encouraged by the strong occupancy that most of our South African businesses are currently enjoying".
Sun International acting chief executive Garth Collins says the group envisages "a steady improvement".
Listed hotel and resort group Gooderson Leisure is hoping trading conditions will improve next year.
It anticipated "another difficult year, but we are expecting a pickup in 2014‚" according to Gooderson's sales and marketing general manager Gail McCann Westphal.
"We are taking this opportunity of lower occupancies to upgrade our properties‚ put in new adventure opportunities and build on‚ so that we are ready for the season when it really comes back to us," she says.
Statistics SA figures point to a recovery in revenues in the industry‚ with total income for the accommodation industry increasing by 12.3% in the three months ending October 2012, compared with the three months ended October 2011. – BDlive
