Industry revenue of “hotels, camping sites and other provision of short-stay accommodation“ in South Africa 2011-2023

South Africa’s hotel industry, if not thriving, is experiencing a steady increase in demand and performance, having attracted significant investor interest over the last few years. In fact, it now constitutes an active segment of the country’s real estate investment market. Revenues in the industry are expected to grow from almost 4 billion U.S. dollars in 2018 to 4.4 billion U.S. dollars in 2023. The current supply is concentrated mainly in large cities such as Johannesburg and Cape Town, which are home to around 30% of the branded hotels such as Mariott and Hilton, in the entire African continent. In fact Johannesburg ranked third in terms of international visitor spending in the Middle East and Africa in 2016, a factor driving hotel demand.

Despite an attractive outlook, factors such as delays in approvals, access to finance, high construction costs and issues with power supply, are hampering industry growth. In fact it is only recently in December 2019, that South Africa’s power crisis eased just a little when state power utility Eskom Holdings SOC, started repairing broken infrastructure.