CAPE Town’s hospitality industry expects a “fair to good” summer season, after suffering one of the worst years ever recorded because of a 20% overcapacity of hotel rooms in the city and depressed markets in Europe.
Fedhasa Cape chairman, Dirk Elzinga, says the hospitality industry is “moderately optimistic” based on a 5% increase in RevPAR (revenue per available room) in October compared with October 2010, which indicates an early recovery. He says hotels are expecting between 50% and 80% occupancies for the coming summer season. Nevertheless, he says it’s difficult to make accurate predictions because the economic crisis in Europe (Cape Town’s core market) is resulting in short lead times and late bookings, with 95% of visitors researching and booking through the Internet. At the moment, occupancies are at the same level as in 2007 and full recovery is not expected until 2013.
Dirk says Cape Town’s hospitality industry suffered the worst winter ever this year. On average, RevPAR over the past year was 10% less than in 2010, indicative of the recession. At some hotels, occupancies went as low as 30%. At least four Fedhasa member hotels closed down: Le Vendôme (Sea Point), The Alphen (Constantia), The Avenue Hotel (Fish Hoek) and The Don Hotel (Sea Point). At least 10 Fedhasa member restaurants closed their doors but many more non-members also shut down. Some 110 guesthouses are for sale.
Despite recessionary markets, Dirk says this summer’s hotel rates in Cape Town will reflect high-season demand. “I think Cape Town can still be affordable and there are always special deals even in the top season. People in Europe are definitely nervous and are postponing their decisions to go on holiday. The lead times for bookings are extremely short. Our hotels have become much more flexible in terms of their rates and there are more hotels offering three- and four-star rates, so visitors can still find affordable options.”
Dirk says the renewed optimism is being fuelled by positive developments, including Cape Town’s nomination as World Design Capital 2014; Table Mountain’s new status as one of the seven natural world wonders; new seasonal flights by Air France and Swiss carrier Edelweiss; Lufthansa’s seasonal return; the expansion of the Cape Town International Convention Centre, which got the green light last week; and Cape Town Tourism’s (CTT) new marketing campaign.
He calls for better co-operation from Government departments, particularly speedier issuing of visas by the Department of Home Affairs. He also calls on South African Tourism, Cape Town Routes Unlimited and CTT to pay much more attention to economically vibrant new markets such as India and China. “We need many more hands on deck,” he stresses.
