Audrey D’Angelo
South Africa had a better tourism season than expected this year, when it had been thought that a slowdown after hosting the World Cup in 2010 would continue, according to the second annual forecast for the hospitality industry issued by accounting services firm PwC yesterday.
PwC now expects continued growth, with demand for rooms exceeding supply by the end of this year, and boom conditions for the local hotel industry by 2016.
It forecasts that by then occupancy will average 53.9 percent across all sectors, with hotels faring best with an average occupancy rate of 62.1 percent.
“As occupancy rates increase we expect room rates to rise at mid-single-digit rates beginning in 2013, roughly approximating the overall rate of inflation,” it said.
“The average room will cost R864 in 2016 – up 4.8 percent on a compound annual basis from 2011. Total room revenue is expected to reach R20.4 billion in 2016, an 8.8 percent compound annual increase from 2011.”
PwC expects the total number of rooms available to rise from 113 000 this year to 119 700 by 2016 and occupancy rates to increase from 47.4 percent last year to 51.3 percent this year, 52.2 percent next year and 53.9 percent by 2016.
“We expect real gross domestic product (GDP) growth in South Africa to moderate to 2.8 percent in 2012 from 3.1 percent in 2011. We then look for somewhat faster increases but do not expect a return to the large gains achieved in the 2000s when the economy was less developed. We expect real GDP to expand at a 3.3 percent compound annual rate during the next five years.
“Going forward, we expect global GDP to continue to grow more slowly than South Africa’s economy, largely reflecting continued weakness in Europe,” the report concluded.