A Growing Business – Investing in SA’s Hospitality Industry

Written by Posted On Friday, 25 September 2015 03:32

Investors take note – South Africa’s hospitality industry is set for even more development, with Cape Town’s tourism sector leading the way.

Within the next five years, the country’s hospitality sector will undergo yet another particularly great boom as foreign investors continue to pump capital into the market by snapping up the various forms of accommodation and real estate available for sale.


The hospitality sector in South Africa consists of hotels, guesthouses, guest farms, game lodges, caravan sites, camping sites and other overnight accommodation; all of which attracts an increasing number of tourists and investors.

Famed for its unique natural beauty and wildlife, friendly people and affordability, South Africa has seen consistent growth in its hospitality industry.

This general consensus is also now supported by hard facts and forensic research completed by international auditing firm PricewaterhouseCoopers (PwC), which recently released the fifth edition of its regular report on the industry; titled Hospitality Outlook: 2015-2019.

According to the report, the country will see an incredible growth and by 2019 the overall occupancy rate across all sectors in South Africa will continue to increase, rising to an estimated 58.3% from 54.4% in 2014.

This makes it all the more sensible to purchase a country lodge guesthouse based in a city or small-town.

The Rainbow Nation has unwittingly reaped the rewards as other African countries such as Nigeria and Kenya suffered substantial losses in both international and domestic tourist travel due to the recent outbreak of the deadly Ebola virus, as well as the growing threat of terrorism and internal violence.

With this in mind, South Africa’s hospitality industry is expected to experience an additional boost as tourists slowly relook their travel destination options; which will again increase the demand of hotels for sale.

According to Hospitality Outlook: 2015-2019, total spending on hospitality rooms in the country rose by 9.1% to R18.9-billion in 2014; with booming room rates being the primary driver.

Hotel occupancy rates rose by 7%, with five-star hotels achieving the fastest growth of any accommodation at 12.8%.

With the market now improving, there is renewed activity in the hotel industry as major hotel chains upgrade current amenities, renovate their properties or make plans to expand and open new hotels.

The report estimates that by 2019, there will be about 63 600 hotel rooms available in South Africa, rising from the 60 800 which were available in 2014.

This has in turn driven further property investment in the hospitality industry, as an increasing number of parties take advantage of guesthouses for sale.

Despite the passing of new, controversial visa legislation by the South African government, which requires parents and guardians travelling with minors to have an unabridged birth certificate that shows the names of both parents, the outlook is still highly positive for investors seeking to make the most of the numerous hotels, guesthouses, and lodges for sale.


With this in mind, South Africa is set to remain a global leader in viable real estate investment, with sound returns and long-term gains.

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