Independent hotels in South Africa have recorded a surge in RevPar (revenue per available room), growing by 46% in December 2022 compared with the same period a year ago, according to statistics released by hotel management software company, RoomRaccoon.
On December 31, the average RevPar was R2 023 – the highest volume recorded by hotel management software company, RoomRaccoon since it launched its South African division in November 2017.
The record-breaking figure comes as a result of increased hotel occupancy over the new year period, which surged to 79% on December 31, in combination with a 20% increase in ADR (average daily rate), from R2 116 in 2021 to R2 560 in 2022.
‘Turning point’
Commenting on the data and the industry’s recovery, Niels Verspui, Market Head of RoomRaccoon South Africa, said: “This was undoubtedly a turning point for the travel and tourism industry in South Africa. The increase in RevPar indicates that hotels are generating better revenue for their spaces by capitalising on high occupancy rates over the festive season to make up for lost revenue on account of the pandemic.”
RoomRaccoon’s data monitors over 4 500 rooms in boutique hotels, B&Bs and guesthouses across the country and currently reflects continued upward momentum going into 2023, with average occupancy rate and RevPar exceeding that of December 2022.
“Although this is very encouraging news, the strong economic headwinds and rising inflation could weigh the pace of recovery this year with ADR expected to increase again to compensate for inflation and rising operational costs,” he said.
Verspui recommended that hotels pay close attention to market data to capture demand and maximise revenue despite uncertain economic times: “Revenue management tools can help hotels remain competitive by automating rates across distribution channels, ensuring that they sell time-limited inventory at the best price to maximise revenue.”
‘Cautiously optimistic’
The Steenberg Hospitality team – including Financial Manager, Byron Hunkin, Marketing and International Sales Manager, Neilen Tolmay, and MD, Catherine Schulze – share Verspui’s cautiously optimistic outlook.
Hunkin indicates that while significant growth has been reported, the industry is not quite back to ‘normal’. “The impact of the war in Ukraine is one factor among a host that has added to the global economic instability during the COVID-19 recovery and has prolonged the recuperation period for tourism.”
However, Hunkin remains positive regarding the industry’s future, pointing out that as air travel increases, and there are regular additions to flights and destinations, all signs point towards the fact that the world is hungry for travel.
“South Africa remains a popular destination for our traditional key European and US markets as well as the Nordic and Benelux markets.”
Schulze echoes Hunkin’s sentiments. “Our industry is always affected by what is going on globally, and one cannot ignore that there is currently significant unsettlement across the world, the ripple effects of which are far-reaching. However, I believe that approaching the future with positivity, while remaining flexible and versatile, is the only way forward.”
She added that, fuelled by the aftermath of the pandemic, travelling habits and how travellers spend money are changing.
“Projections towards full recovery and, ultimately, success in the hospitality industry will depend on whether businesses can harness demand through strategic and structural adaptation, which is pivotal to staying relevant in the industry,” said Schulze.
