| |
 |
| |
|
| |
| |
 |
Subscribe to our
bi-monthly
HPASA newsletter. |
|
 |
|
|
 |
|
February 2011
MAJOR INCREASE
IN OCCUPANCY DEMAND IN CAPE TOWN’S
TOP END HOTEL SECTOR |
|
| |
By Joop
Demes, Pam Golding Hospitality
The highlight of another
great conference was for me
the session that was moderated
by Alex Kyriakidis, the Global
Managing Director of the Deloitte
Tourism, Hospitality & Leisure.
Cape Grace & One&Only
Hotels
“In November 2010 both
the Cape Grace and One&Only
Hotels increased occupancies
by over 45% compared to November
2009.
Furthermore, the Cape Grace’s
November 2010 occupancy was
the highest for any month since
the year 2002 – a notable
achievement in an economy which
is still in an early phase of
recovery. Both these hotels
report strong traction for the
season ahead,” says Demes.
15 on Orange and Crystal
Towers
Both 15 on Orange and Crystal
Towers are trading at occupancy
levels, which are very respectable
for hotels within their first
year of trading in a competitive
urban location. |
 |
Cape Royale Hotel
The Cape Royale Hotel opened its doors
in 2008 and traded at close to 80%
occupancy in November 2010, barely
two years after opening.
While these achievements beg the question
as to whether these new hotels are
drawing demand from other hotels in
this sector of the market, the answer
is no.
Radisson Blu and Westin Grand
At the Radisson Blu Hotel occupancy
during this same period was in the
upper 80% bracket – considerably
ahead of November last year, while
the Westin Grand had occupancy close
to 80% and very similar to the good
occupancy recorded during November
2009. All these hotels showed revenue
growth this year compared to last
year.”
Closing the Gap of Supply
& Demand
Demes says it is of interest that
hoteliers in Cape Town – and
predominantly at the top end of the
market – are building demand
on the back of increased inventory.
“They are in fact hard at work
closing the gap between supply and
demand. The sales director of a large
hotel group recently indicated that
business had changed drastically and
they, as he put it, needed to beef
up their resources to pro-actively
find and fetch the business as opposed
to waiting for guests to make reservations.
Decade Supply Comparisons
“It
is interesting to look at the supply
of hotel rooms in Cape Town over the
last 10 years.
|
| • |
The 5-Star
hotel sector increased
its supply of rooms from 2008
rooms to 3395 rooms currently,
reflecting an increase of 1387
rooms or 69% , |
| • |
while rooms in
the 4-Star market
increased from 3674 to 4764
rooms – an increase of
1090 rooms or almost 30%. |
| • |
This is seen against
the backdrop of overall high
occupancy levels of 72.3% experienced
in the Cape Town hotel sector
in both 2006 and 2007, coupled
with a buoyant economy, and
it was these factors that spurred
the development of further hotel
rooms in the top end of the
market, not the World Cup 2010,”
he says. |
| • |
On the other hand,
in the 3-Star hotel
market the number of
rooms increased only marginally
from 2564 to 2696 rooms, i.e.
only by 132 rooms or 5%, |
| • |
while surprisingly
there was no increase in rooms
whatsoever in the 2-Star
and 1-Star market. |
Development Opportunity
“This raises the view that an
opportunity exists for the development
of additional rooms to cater for the
1-3-Star market. The budget and economy
hotel market in Cape Town has seen
no new supply in the last 10 years
and as a result the demand has simply
been stagnating and in some instances
declining. In our opinion it is the
supply that will grow demand in a
destination, with the proviso that
the destination is quality, and remains
so.
| To
illustrate this consider the
fact that Sol Kerzner built
Sun City in the middle of nowhere
– it was not the area
that showed demand; it was quality
supply which created the demand,”
says Demes. |
Bed-Nights Increase
“Given the above statistics
I estimate that the demand for 5-Star
rooms in Cape Town in the month of
November 2010 grew by at least 17
000 bed-nights compared to November
2009. It also clearly illustrates
the point that the increased supply
of quality accommodation has led the
demand and continues to increase demand
as long as the destination is good
and appealing.”
Concerns
Demes says the weakening of the Dollar,
the Pound and now the Euro against
the Rand is concerning for those hoteliers
in Cape Town who are much more dependent
on international business compared
to, for instance, Gauteng and Durban,
and this will continue to place pressure
on hotel rates.
Seasonal Special Offers
“It’s
true that a gap between supply and
demand in any hotel market in the
world results in specials. Cape Town
is no exception and the good news
this season for South Africans and
neighbouring countries is that there
are some really exciting offers here
from luxury 5-Star down to economy
hotels.
| However,
one is advised to make good
use of this opportunity as it
may well be a different story
towards the end of 2011,”
he says. |
The Season Ahead
“The season ahead is by no means
showing 100% occupancy, but is however
looking substantially better overall
when compared to the same period last
year – despite the increased
inventory. In my opinion, the trend
of increasing demand will therefore
continue, and directly as a result
of the fantastic Soccer World Cup
2010, which was hosted by South Africa.
| Demand
is building in Cape Town and
particularly at the 5-Star level
where we have seen inventory
increase by 51% since 2007,”
adds Demes. |
|
|
 |
PAM GOLDING
Tourism & Hospitality
Consulting
(Pty.) Ltd.
Contact Joop Demes
on
jdemes@goldinghotels.co.za,
Office +27 (0) 21
426 4440, Cell +27
(0) 82 883 2231 |
|
|
|
|
|
|
|
 |
|
