HTLroundtable south africa+ - snapshot 2016
26 Aug 2016
One&Only Cape Town Hotel Cape Town, 24 August 2016
"South Africa is probably the most mature hotel market in Sub-Saharan Africa, and the brand penetration is at approximately 70 % according to our market sample. Nevertheless, the country still bears plenty of hotel development potential. This holds mostly true for the budget segment across the region, but also for the hostel sector and the lifestyle/boutique niche in major cities as well as with regard to resorts along the coastline", concludes Christian Walter, Managing Director of PKF hotelexperts, who hosted the firm's second HTLroundtable south africa+ in Cape Town in the end of August. "While international brands are still pushing to enter the market, it is remarkable to see that Cape Town in particular seems to be an incubator for innovative and highly appealing new concepts that aim at growing not only at the Southern tip, but also on other continents - including Europe; Once in Cape Town (www.onceincapetown.co.za) is a great example, and its founder Gérhard Human is ready to go twice, thrice, and more."
This is, however, not the one and only showcase of South African hospitality. Taking place at the One&Only Hotel at Cape Town's waterfront, one of the major developments of South Africa's hotel legend Sol Kerzner, the event gathered a diverse group of hotel group development managers, architects, tourism experts, lawyers, operators, investors, and consultants. The plethora of hot topics that seemed to be of particular importance to the hospitality professionals in attendance included alternate means of financing such as crowd funding, the limited air lift into Cape Town as the country's main urban travel and tourism magnet, and strategies to further the development of tourist attractions along the coastline of the Cape region.
According to STR Global, the hotels in South Africa achieved an average occupancy rate of 62.7 % in 2015 (increase by about 0.8 percentage points compared to 2014). The average net room rate increased from about € 71 in 2014 to about € 76 in 2015, thus demonstrating an increase by 7.3 %. In the same period, the revpar (revenue per available room) increased by 8.7 %, reaching about € 48 in 2015. Furthermore, in Cape Town during the same period the net room rate increased by 10.9 % (from € 89 to € 99) and revpar by 8.6 % (from € 60 to € 65). However, the occupancy rate slightly decreased from 67.5 % to 66.1 %. Maryke Dreyer, Business Development Manager for South Africa – STR, comments: “Despite the continuous pressure on the South African economy, we do see an increase in occupancy and average daily rates (ADR) achieved across South Africa, in particular Cape Town, mostly in the luxury markets. More foreign visitors see South Africa as an attractive option”.
Taking on a broader perspective, the participants also discussed the challenges of the various tax regimes across the African continent and the establishment of corporations in new jurisdictions, in particular from a hotel group's point of view. Theo Vermaak, Regional Director for Africa at PKF International (www.pkf.com) and based out of Durban, introduced the PKF Africa Tax Guide, a handbook summarising the most important regional peculiarities at a glance. In case you are interested in obtaining a complimentary copy of this, please feel free to contact us by email at christian.walter(at)pkfhotels.com.
The HTLroundtable coincides with the appointment of PKF hotelexperts' new senior team member Nils Heckscher, who will be overseeing PKF's hotel consulting activities in Southern Africa from his home base in Cape Town. “Everybody is looking towards Africa, and PKF is no different. Having spent 28 years in South Africa, and with a strong international network I am really looking forward to strengthen the PKF hotelexperts brand and to work at becoming a reliable partner for people developing hotels in Africa. The continent is so vast and diverse and offers many opportunities but also particular challenges. With the PKF hotelexperts network, I am certain we will be able to add great value to new and existing projects” says Nils Heckscher. He trained in Europe and has been working in hotels in South Africa for 28 years, with the last three spent in consulting. He currently consults to the owners of a new boutique hotel project with 51 keys on St. Georges Mall in Cape Town. Other major developments in the Mother City include, amongst many others, Carlson Rezidor's first Radisson Red on the African continent, scheduled to open at the V&A Waterfront in mid 2017. Radisson Blu Hotel & Residence Cape Town, a 338-key conversion of a 23-storey office building, is currently under way in the central part of town and the dual branded (Sun Square and Stay Easy) Tsogo Sun development with a total of 500 keys is set to open at the end of 2017. It has also been rumoured that Starwood closed a deal for a W hotel in central Cape Town.
The well-attended event concluded with a networking dinner at the One&Only's Nobu restaurant. The team of PKF hotelexperts will be back on the road for the Africa Hotel Investment Forum in Kigali, Rwanda (4 to 6 October 2016), and the HTLroundtable gulf coast in Accra, Ghana (12 October 2016).
For further information on our expertise in Africa, please feel free to contact our team at nils.heckscher(at)pkfhotels.com.