Leading experts at Pricewaterhouse Coopers have predicted a boom in the South African hospitality sector, despite the decrease in profitability that the sector has seen over recent years.  In a report entitled “Unpacking Hospitality Trends”, analysts have forecast that the number of visitors to South Africa will see a 4.1 percent compound increase year on year, reaching 16.85 million visitors by 2016.

The South African hospitality industry has suffered over the past years.  Strongly affected by the 2008 financial crisis which caused a serious decrease in the number of visitors partaking in the hospitality sector, hotel room occupancy rates fell 18.8 percentage points over a four year period, from 71 percent occupancy in 2007, to 53 percent occupancy by 2011.

A spike was seen in visitor rates in 2010, connected to the 2010 FIFA World Cup held in South Africa that year.  This seems to have signalled a turning-point in the hospitality sector.  Traveller rates grew suddenly by 14.8 per cent, providing a boost for the continuing regrowth of the sector.  PwC Leader of Hospitality and Gaming, Nikki Forster, explained: “We had expected that in the absence of the tournament in 2011, the number of travellers would decline. However, this was not the case. The number of travellers continued to increase, rising by 4.3 percent to 13.77 million”.

Forster continued with the outlook, saying: “After 2012, the improving economic climate will lead to steady gains in both foreign and domestic visitors in South Africa”.

It is in fact the growth of the African traveller base that is expected to give the South African hospitality sector a significant boost.  Given the financial troubles prevalent in Europe, travel and income from Europe is predicted to remain low.  Visitors from the Asia-Pacific region continue to provide a stable source of income.  However, the number of visitors from other African countries is seeing a substantial increase.

Furthermore, growth is to be expected in the domestic travel market as well, albeit slightly less aggressive growth.  The report forecasts that the number of domestic travellers will see a 3.3 percent annual compound rate of increase, achieving a figure of 6.4 billion domestic visitors by 2016.

PwC expects to see total accommodation revenue increase significantly on all sides in the coming years.  The majority of revenue will continue to be provided by hotel accommodation; with the report predicting that by 2016, total hotel room revenue will reach 14.6 billion rand ($2 billion).  Caravan and camping sites, bush camping, and other alternative accommodation solutions are set to become the fastest-growing accommodation family, with the report estimating an annual compound increase of 11.1 percent spanning 2012-2016.

In conclusion, Forster makes a case for continuous investment and innovation – as ever, the keys to remaining at the forefront of an industry.  She advises that: “The major players in the industry are continuing with their capital refurbishment programmes to keep their products current and to maintain their competitive edge”.

Image via south-africa-tours-and-travel.

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