December was a bleak month for South Africa’s tourist accommodation industry, with holiday fever not contagious enough to end the tough year on even a slightly positive note.
Although the industry still raked in just over R2.5 billion, hotels, guest houses and guest farms, as well as caravan parks and camping sites, all recorded declines in income during what is usually the sector’s bumper season. Occupancy rates were also low at a combined average of just 54%.
Just like the country’s retailers, which also saw decreases in revenue during December, owners of holiday property will be hoping for a better 2019. The new figures released by Stats SA reveal that caravan and camping sites were the hardest hit, seeing a 19.4% drop in income over the festive season.
Guesthouses and guest farms recorded a 12.2% decline and hotels a 4.2% drop. Not even the 1.4% increase in the average cost of holiday stays per night was able to afford tourism accommodation the luxury of just breaking even.
In total, the revenue collected from nightly guest rates, excluding money spent on food, beverages, or other services, was:
Hotels R1.5bn – 51.4% occupancy.
Caravan parks and camping sites R47.9 million – 45.1% occupancy
Guesthouses and guest farms R178.8m – 47.1% occupancy
Other accommodation R767.7m – 68.6% occupancy.
Overall income generated from accommodation tariffs earned the industry R2.52bn, but with the addition of restaurant and bar sales, and other facilities or service charges, the total income was R4.7bn.
Interestingly, tourism accommodation providers in the “other” category – which includes lodges, bed-and-breakfast establishments, self-catering establishments and “other” establishments not elsewhere classified – saw an 11% increase in accommodation income during December.
While the data does not specify Airbnb accommodation figures, figures released recently show since its founding in 2008 hosts across South Africa earned more than R3.6bn.
However, Mike Greeff, chief executive of Greeff Christie’s International Real Estate predicted at the start of the year that properties purchased for the purpose of Airbnb would decline in 2019. This, he said, would be because of the “oversupply of Airbnb properties”.
Stats SA’s tourism and migration data reveals that tourists increased by 1.6%, from 991 579 in December 2017 to 1 007 155 in December 2018. The data also shows that overseas tourists (259 403) decreased
by 0.9% from 261 728 in December 2017.
Tourists from Sweden and Germany, however, increased. Tourist numbers from SADC (730 401) also grew by 2.2% from 714 389 in December 2017, with the highest increase being those from the Democratic Republic of Congo and Zimbabwe respectively.
It is hoped that since President Cyril Ramaphosa affirmed his commitment to tourism in his State of the Nation address, tourist figures will see further increase and holiday accommodation owners will be among the beneficiaries.
“The focus on economic growth sectors, including the ocean economy, tourism and so on, are all positives (of Ramaphosa’s address),” says Seeff Property Group chairperson Samuel Seeff.
New grading standards
Revised grading standards for accommodation establishments in South Africa take effect on April 1.
The aim of the revised criteria was to advance and maintain a recognisable, credible and globally benchmarked system of quality assurance for accommodation and venues in South Africa, says Darryl Erasmus, chief quality assurance officer at SA Tourism.
The Grading Council team kicked off its countrywide provincial road shows in Cape Town recently with the aim of the road shows being to outline the new grading criteria to all establishment owners, and at the same time introduce the new accolades programme to all stakeholders.
“Our aim is to ensure that all visitors who stay at our graded establishments have only the best memories and experience which will entice them to always choose to stay in graded establishments when going on holiday or business travel,” said Erasmus.
Accolades include insignia and criteria for niche markets such as child-friendly, pet-friendly, wedding venues, spa and wellness facilities, and 4x4.