Hospitality Industry in South Africa - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The market is segmented by Type (Chain Hotels and Independent Hotels), by Segment (Service Apartments, Budget and Economy Hotels, Mid and Upper Mid Scale Hotels and Luxury Hotels).

Market Snapshot

Hospitality Industry in South Africa
Study Period: 2016 - 2026
Base Year: 2020
CAGR: 3 %

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Market Overview

The hospitality industry in South Africa is emerging with rising number of travelers who are visiting the country for business and leisure purposes. The country has been on the top tourist destinations in the African continent with approximately 10.5 million arrivals recorded in 2018 which was 1.7% growth over 2017. Domestic travel is also on the rise in South Africa and recorded around 6 million visitors in 2018. In order to accommodate rising travelers, the hospitality industry is expanding rapidly in the country and is scoring dynamic key performance indicators. The revenue generated from the hotel accommodation sector rose to R 16.7 billion in 2018, which was a 0.5% rise compared to 2017. The growth of hotel rooms/keys is growing with an additional 3,500 rooms which are going to be added in the coming five years. The short-term home rentals like Airbnb has been growing rapidly in the region. South Africa in recent years. For instance, in Cape Town, Airbnb rentals increased from around 10,000 in 2015 to around 40,000 by the end of 2018.

Scope of the Report

A complete background analysis of the Hospitality Industry in South Africa, which includes an assessment of the industry associations, overall economy, and emerging market trends by segments, significant changes in the market dynamics, and market overview is covered in the report.

By Type
Chain Hotels
Independent Hotels
By Segment
Service Apartments
Budget and Economy Hotels
Mid and Upper mid scale Hotels
Luxury Hotels

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Key Market Trends

Rising Tourism Sector is Driving the Hospitality Industry in South Africa

South Africa has been gaining more significance as the leading convention destination in the continent as Cape Town which is known as the Events Capital of Africa was listed as one among the top-50 convention cities across the globe. The South Africa National Convention Bureau saw the opportunities for improvement and established a Bidding Support Programme in 2016 to attract conventions to South Africa and 94 bids for conventions over April 2017 to March 2018 period to expand meetings, incentives, conferences and exhibitions (MICE) sector to contribute to growth in international tourism. Though the growth in foreign tourism dropped to 1.7% in 2018, which was down from the 2.4% gain in 2017 but managed to attract more tourist arrivals in 2019 and is forecasted to continue in the future years.

South Africa Trend 1

Growing Key Performance Indicators are Attracting More Investments

South Africa has been recording dynamic key performance indicators from the past five years. The average daily revenue growth averaged for 7.9% compounded over the study period and during 2017 and 2018, the average room rate edged up 1.2%. Durin 2019, the guest night arrivals were increased and showed a 1.5% increase rising the overall occupancy rate and revenue per available room. The Tourism Amendment Bill 2019 issued in the Government Gazette on 12 April 2019 is going to regulate the tourist guide profession by regulating ‘short-term home rentals’ under the Tourism Act which is going to regulate the home-sharing apps such as Airbnb and their hosts. This regulation is forecasted to increase the revenue flows to the organized and registered accommodation units.

South Africa Hospitality 2

Competitive Landscape

The hospitality industry in South Africa is a combination of international hotel brands and domestically grown brands. The country has several individual hotel properties that are spread across the major cities of the country. South Africa has around 192 hotels that belong to international brands that are currently operating in the country which is very high in the African region. All these hotels together adding more than 24,300 rooms/keys to the supply. There are around 18 hotels are in the construction pipeline for this region upon completion which is going to add more than 2,500 rooms/keys to the supply. 40% of these are already under-construction whereas 60% are at various stages of construction (from planning to pre-construction phases).

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS AND DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Dynamics

      1. 4.2.1 Drivers

      2. 4.2.2 Restraints

      3. 4.2.3 Opportunities

    3. 4.3 Impact of COVID-19 on Hospitality Industry

    4. 4.4 Insights on Revenue Flows from Accommodation and Food and Beverage Sectors

    5. 4.5 Leading Cities in South Africa with Respect to Number of Visitors

    6. 4.6 Investments (Real Estate, FDI and others) in the Hospitality Industry

    7. 4.7 Technological Innovations in the Hospitality Industry

    8. 4.8 Insights on Shared Living Spaces Impact on the Hospitality Industry

    9. 4.9 Insights on Other Economic Contributors to the Hospitality Industry

    10. 4.10 Value Chain Analysis

    11. 4.11 Porter's Five Forces Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 Chain Hotels

      2. 5.1.2 Independent Hotels

    2. 5.2 By Segment

      1. 5.2.1 Service Apartments

      2. 5.2.2 Budget and Economy Hotels

      3. 5.2.3 Mid and Upper mid scale Hotels

      4. 5.2.4 Luxury Hotels

  6. 6. COMPETITVE INTELLIGENCE

    1. 6.1 Market Concentration

    2. 6.2 Company profiles

      1. 6.2.1 Accor SA

      2. 6.2.2 Marriott International Inc

      3. 6.2.3 Hilton Worldwide Holdings Inc

      4. 6.2.4 Radisson Hotels

      5. 6.2.5 Melia Hotels International SA

      6. 6.2.6 Rotana Hotels

      7. 6.2.7 InterContinental Hotels Group

      8. 6.2.8 Mangalis Hotel Group

      9. 6.2.9 Best Western Hotels & Resorts

      10. 6.2.10 Hyatt International

    3. *List Not Exhaustive
    4. 6.3 Loyalty programs offered by Major Hotel Brands

  7. 7. INVESTMENT ANALYSIS

  8. 8. FUTURE OUTLOOK OF THE SECTOR

  9. 9. APPENDIX

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Frequently Asked Questions

The Hospitality Industry in South Africa market is studied from 2016 - 2026.

The Hospitality Industry in South Africa is growing at a CAGR of 3% over the next 5 years.

Marriott International Inc, Accor SA, Hilton Worldwide Holdings Inc, Radisson Hotels, Meliá Hotels International SA are the major companies operating in Hospitality Industry in South Africa.

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