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Is Cape Town over its World Cup ‘hangover’ and are 5-Star Hotels heading in a positive direction?


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Is Cape Town over its World Cup ‘hangover’ and are 5-Star Hotels heading in a positive direction?

  1. 1. Is Cape Town over its World Cup ‘hangover’ and are5-Star Hotels heading in a positive direction?Hilton Hotel South Africa JohannesburgIs Cape Town over its World Cup ‘hangover’ and are 5-Star Hotels heading in a positivedirection?Article by HPASAThe outlook for the 5-Star hotel market in South Africa is looking brighter, says Joop Demes,CEO of Pam Golding Hospitality, particularly when viewed against the backdrop of globaluncertainty.“As far as many of us can remember, Europe’s financial future has never seemed quite sofragile,” he says. “To comment with any certainty on the 2012 outlook for Europe and on theexchange rate of the Euro versus the Rand will depend on Europe’s politicians showing soundleadership by saving the Euro through fiscal and monetary reform.”Demes says while Africa has been fairly insulated from the Euro crisis due to its lack ofmeaningful integration into the global financial system, the fluctuations in the Rand’s exchangerate do play a major factor in terms of foreign investment and in terms of the value-for-moneyproposition for foreign tourists to South Africa.“The Rand exchange rates to the Euro, Pound and Dollar that prevailed during December 2011and January 2012, did translate on average to a 15 percent discount compared to prices lastseason. There is no doubt that this has contributed to a sharp improvement in ‘high end’leisure business in Cape Town and to a lesser extent in Johannesburg.“Lead times for visitor bookings are indeed becoming shorter and the 2010 Soccer World Cupgave many new visitors a very favourable impression which is clearly paying off as foreigntourists are attracted by word-of-mouth recommendations from friends and family who werehere June/July 2010. This is coupled with prices that are lower compared to the prices duringthe World Cup event,” he says.Demes adds it is very positive to see the resilience of the big brands in Cape Town, with hotelssuch as the Cape Grace and the Mount Nelson showing high double digit increase in RevPAR(revenue per available room) with an increase in room rate and occupancy for the first couple ofmonths of the season.Quoting statistics extracted from the December 2011 STR Global South African Hotel review, hesays that in the Cape Town 5-Star market – written off by many market commentators over thepast six months – hoteliers experienced a very pleasing final quarter of 2011. During the periodOctober to December 2011 the occupancy figures averaged 66.4 percent, reflecting an increaseof 18.1 percent compared to the same period last year. 1/4
  2. 2. “Cape Town 5-Star hotels increased their 2011 annual average occupancy by 8.5 percentcompared to the 2010 World Cup year. In what remains a competitive market, the encouragingnews is that Cape Town’s 5-Star hotels managed on average to increase their room rate by 2.3percent during December 2011 compared to December 2010,” says Demes.“While the January 2012 STR review has not yet become available (at the time this commentwas issued), it appears to have been another rewarding month for the big brands in the 5-Starhotel industry in Cape Town. The Cape Grace, One&Only, The Table Bay and Radisson Blu allexperienced very healthy increases in RevPAR compared to last year, with the Mount Nelsonnotable for phenomenal 49.5 percent growth in RevPAR in January 2012 compared to January2011.“We anticipate that the January 2012 RevPAR growth for the Cape Town 5-Star market will bein excess of 20 percent compared to January 2011,” he adds.The outlook for February, March and April (2012) is also positive among most of the 5-Starhoteliers; the Cape Grace is on target to record its best month ever in February 2012 and theMount Nelson already has 17 percent more business on its books for the rest of 2012 comparedto last year. “The introduction of new direct flights, the positive image of Cape Town and South Africa,unrest in the Middle East and an improved exchange rate have no doubt played a role forimproved trading at both of our hotels,” says Sandro Fabris, regional managing director inAfrica for the Orient Express Group – owners of the Mount Nelson in Cape Town and theWestcliff Hotel in Johannesburg.Demes says December 2011 hotel occupancy throughout South Africa grew by 11.5 percentcompared to December 2010 and the consensus among industry leaders is that business andevent travel will also fare better during 2012. “It seems that increased demand throughout thecountry is starting to absorb the room inventory that escalated sharply during the period 2008 to2010.“There are a number of international funds and private individuals seeking operators and hotelsthat provide a compelling offer to a target market that can demonstrate growth and stability. Inconjunction with this there are a number of sellers needing to raise liquidity and this could wellresult into a one or two larger deals with critical mass that will pave the way for one of the biggerglobal brands,” he says.He says Accor, Starwood and Hilton have all announced aggressive expansion plans inSub-Saharan Africa while Marriott, which for many years has been looking for an opportunity inSouthern Africa, has announced the senior vice president appointment of industry specialistAlex Kyriakidis, former global chief of hospitality for Deloitte.“There are also a number of luxury hotels for sale which offer exceptional value as long termstrategic investments and there are good deals to be done with global operators that areseeking presence in the gateway cities of Southern Africa, for example Johannesburg and Cape 2/4
  3. 3. Town.“It is going to be an interesting year and acquiring properties to re-brand seems at present abetter option compared to building something new. When speaking to a number of regionalhotel operators most agree the timing is right to acquire existing hotel properties in SouthernAfrica,” adds Demes.For further information contact visit the HPASA website or get in touch with Joop Demes fromHPASA on 082 883 2231. About the AuthorHPASA is a collaboration of 5 highly respected hospitality business brokers, companies andindividuals, all of whom come with proven track records within their chosen fields. Thepartnership offers a range of ready-to-use solutions for both small hospitality businesses, aswell as large companies offering tourism industry services in South Africa and abroad.Get in touch with by visiting the HPASA Facebook page or Twitter profile<a/>.Use and distribution of this article is subject to our Publisher Guidelineswhereby the original author’s information and copyright must be included.A night on the townshipHilton Hotel South Africa JohannesburgTwelve busty, cherub-faced women, they are like sirens as they stand in the foyer of the SowetoHotel and give a beautiful rendition of Nkosi Sikelel iAfrika – "Lord Bless Africa" – theanti-apartheid hymn and, since 1994, the joint national anthem of …Hilton Hotel South Africa Johannesburg question by Jennifer L: safe and trendyneighborhoods/hotels in Johannesburg, South Africa?My husband and I will be in Johannesburg in May (Thursday through Sunday) for a shortvacation in between business trips. We would like to stay in a trendy location with funrestaurants and character but we obviously want to be safe. We love good wine and food,boutiques, and people-watching cafes. Any guidance on neighborhoods or hotels (we’re notHyatt/Hilton people) would be absolutely appreciated! Thank you very much!Hilton Hotel South Africa Johannesburg best answer:Answer by Frank SHitel Fire and Ice in Melrose Arch is affordable – The area is trendy, safe with many modernfacilities restaurants etc. 3/4
  4. 4. More details on the Melrose Arch The other areas would be Rosebank. I would suggest the Crown Plaza Rose bank. It is close to the Gautrain station. You can take the train to the Airport, to Sandton City and to Pretoria. It is an express train – very safe and fast. Rosebank mall is extremely trendy with the African Rooftop market. Rosebank details : Crown Plaza Details : sicreative=10450028404&dp=true&sicontent=0&sitrackingid=340961722&cm_mmc=Google-PS -CrownePlaza_AUT-_-G+B-AMEA-_-ZAF-Johannesburg+The+Rosebank-_-crowne+plaza+joha nnesburg+the+rosebank&siclientid=2056 Gautrain Details : You can also try Sandton City. Trendy – Malls modern buildings. Hotel to stay could be the Holiday Inn. Then I can suggest Monte Casino – Casino complex with malls, theatres and restaurants/movies. Try the Southern Sun at Monte Casino. (You can use this website to book into the Southern Sun) Enjoy! More information on South African experience at : 4/4Powered by TCPDF (