SA rates lowest among 5 countries

JOHANNESBURG – Auditing  firm PricewaterhouseCoopers (PwC) sees South African hotel revenue growth at only 3.3 percent annual rate between 2019 and 2023. 

This is the lowest annual growth rate amongst the five countries for which they give a forecast in their report, Hotels Outlook – 2019 to 2023: Future resilience. The other countries covered are Kenya, Mauritius, Nigeria and Tanzania. 

The PwC report provides data on accommodation revenues for the hotel sector in South Africa. Revenue from food and beverage as well as other services is excluded.


The 3.3% percent revenue growth forecast is well below what the government is hoping for, as the target is to double the number of tourists coming to South Africa to 21 million by 2030. PwC said growth in the number of foreign tourists visiting South Africa eased to 1.7% percent in 2018 from the 2.4% percent gain in 2017 and the 12.8% percent increase in 2016.

In his speech to Africa’s Travel Indaba in May, South African President Cyril Ramaphosa said 10 tourism challenges needed to be addressed in order to allow the tourism industry to be the vibrant job creator that he expected it to be. “Tourism, as your host, Minister Hanekom aptly put it during his opening address, is the new gold. It is a sector that is thriving and that has tremendous potential for further growth and for the creation of jobs,” Ramaphosa said.

“Firstly, we must reduce the onerous and often unnecessary bureaucratic red tape that tourists who want to visit our countries face. This requires of us to streamline our tourist visa regimes,” he added. “As South Africa, we are committed to working towards the African Union’s goal of visa free travel and a single African air transport market. We are in the process of radically overhauling our visa dispensation for the rest of the world and introducing a world-class e-visa system,” he noted.


The tourism data released by Statistics South Africa (StatsSA) showed a 5.0% percent year-on-year (y/y) drop in tourist arrivals in March after a 0.6% percent y/y fall in February and a 3.2% percent y/y drop in January, but KwaZulu-Natal (KZN) should have bucked this trend as the new Maputo-Katembe bridge makes it easier for Mozambican tourists to visit KZN, as well as the introduction of a three-times-a-week direct flight between Durban and London by British Airways in October 2018.

PwC in their outlook said online travel sites were allowing visitors to become more price conscious, which would dampen revenue growth.

It noted that South Africa was becoming more aggressive in bidding for convention business, supporting growth in international tourism. In that respect KZN is well placed with several large convention centres.  


Growth in domestic tourism and adventure tourism will benefit mid-market hotels appealing to millennials. This will help KZN hotels along the coast and in the Drakensberg, but PwC said that Airbnb growth would compete at the low end of the market, but will not have much of an impact at the high end.

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The bedrooms are primarily black with earthy tones, offset by crisp white linen and ceramics.


PwC were optimistic about KZN tourism growth. They noted that Durban hotel guest nights had risen by nearly 6% percent in early 2019 after a 2% percent decline in 2018. Despite the decline in the number of guest nights, the average daily rate (ADR), which is the average rental income per paid occupied room in a given time period, rose by 3% in 2018 so hotel revenue increased slightly. PwC said the proposed Tourism Amendment Bill 2019 had attracted a fair amount of comment from small businesses and economists, despite the Bill’s stated aim of providing for the development and promotion of sustainable tourism in South Africa.


It said the most controversial aspect of the Bill was its proposal to regulate “short-term home rentals” under the Tourism Act. This means home sharing apps such as Airbnb and their hosts will soon be regulated in South Africa, which might curtail tourism by budget-challenged tourists. Although these tourists may skimp on accommodation, they still tend to spend money on food and drink and seeing tourist attractions.

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