CAPE Town hotels are not overpriced, as is often alleged. In fact, its four-star hotels are 25% cheaper than those in comparable cities around the world, while rates at most of its five-star hotel are on a par with those of their international competitors.
This is the result of a Fedhasa Cape survey conducted over 30 weeks this year between April and November, during which hotel prices in Cape Town were compared with those in similar cities, including Melbourne, Barcelona, Vancouver, Boston, Nice, Hong Kong and Munich.
Fedhasa Cape chairman, Dirk Elzinga, says the periods when the prices were compared fell mainly during spring and autumn. This is because while Southern hemisphere seasons coincided, seasons differed when compared with Northern hemisphere hotels. Dirk says prices in the eight cities were compared every week by converting them into the same currency (euros). He declines to give details of the rates, saying the organisation wanted to keep this information in-house.
“The outcome is that, in terms of pricing, Cape Town is on a par with all these cities, which is good news. Secondly, the analysis confirmed that Cape Town has a significantly wider variety of inventory and room types (more than 200 hotels and guesthouses) available than most other cities, offering enormous choice for visitors across all price ranges. It is therefore not true that Cape Town is more expensive than the rest of the world. As a destination, we are extremely competitive,” he says.
Dirk says the survey was done to gain clarity on the contributing factors that led to the perception that Cape Town was more expensive. It was also done in response to many “experts” in and outside the industry having suggested during the recession that tourists would return if hotels dropped their rates.
He says most Cape Town hotels took the decision to try and retain their average room rates over the recession period to avoid a price war, although specials were offered from time to time.
He explains that hotels worldwide adopted one of two strategies to cope with the recession: either cutting rates to compete on price, or retaining their room rates and accepting a loss on occupancy. “It is apparent that those that retained their rates were able to recover faster than those that decided to cut their rates. Smaller establishments are finding themselves in a better position to recover faster, given that they have fewer overheads,” he says.
