SA`s hotel sector shows first growth spurt since 2010

Source: Tourism Update, 11/07/2016

South Africa is in for a boom in new hotel builds, with both
international and local brands planning a stronger presence in the
country and beyond in the next five years or so.


The hospitality sector last experienced such a growth spurt ahead of
the World Cup in 2010. Cape Town is the central focus of the expansion.

Global group, Carlson Rezidor, is particularly ambitious and aims to
have 20 hotels open or under development in South Africa by the end of
2020.


Andrew McLachlan, Senior Vice President, Business Development, Africa
& Indian Ocean for the Rezidor Hotel Group, told Tourism Update that
South Africa was a key country for the group, which currently has
eight hotels operating in the country, and a further five under
development.


"Over the next 12 months we will open three of the five hotels that
are under development," he said. Among them is the very first Radisson
Red in Africa, which will be in the V&A Waterfront, Cape Town,
offering "an upscale lifestyle select 252-room hotel product with a
focus of art, music and fashion".


In addition, the group will open its fourth Park Inn by Radisson in
Polokwane – an upper-midscale 160-room property. "Radisson is the
brand we will take into the depths of the South African market," says
McLachlan.


The third property will be the group`s first hotel and apartment
product in South Africa, a 23-storey, 320-room upscale Radisson Blu
Hotel & Residence in Cape Town. It is expected to open in six to eight
months.


A first for Radisson Blu is safari product, now in design phase. The
tented safari lodge with 120 luxury tents will be developed inside the
Kruger National Park.


"The Carlson Rezidor Hotel Group is also in advance negotiations for
more hotels across key locations within South Africa, which includes
Durban and Pretoria, which we hope to announce during the second half
of 2016 and bring to market within 30 months," comments
McLachlan.


Local chain, Tsogo Sun, is developing a 500-bedroom hotel complex in
the Cape Town city centre on the corner of Buitengracht and Strand
streets, for a total investment of R680 million, consisting of two
hotels, a 200-bedroom SunSquare hotel and a 300-bedroom StayEasy
hotel. Included in the complex will be banqueting and conference
facilities. Expected completion date is September 2017.


"This investment represents our continued commitment to the area and
brings the total number of Tsogo Sun rooms in the Cape Town city
centre to over 2 000, which is very substantial indeed," says CEO,
Marcel von Aulock.


Sun International is set to open Time Square at Menlyn Maine in the
eastern suburbs of Pretoria next year, an entertainment complex with
five-star hotel that will become its flagship property.


Through its empowerment partners, Emfuleni Resorts, it is involved in
a R1.3 billion (€74.2m) mixed- use proposal for further development of
the Boardwalk Precinct in Port Elizabeth. A hotel features as one of
the options for inclusion and, according to Michael Farr, Group
General Manager: Brand and Communications, there is sufficient space
on the site. However, viability still has to be assessed. Should the
project go ahead, the hotel will fall into the three- or four-star
category, so as not to compete with the existing five-star Sun
Boardwalk.


At Emperors Palace Hotel, Casino, Convention and Entertainment Resort,
next to OR Tambo International Airport, a R112m (€6.4m) expansion of
the select-services, three-star Peermont Metcourt hotel by 100 rooms
is currently under way, with the planned opening in December. Emperors
Palace will then offer 757 rooms over four hotels.


The Peermont Metcourt was designed primarily for business travellers
and convention centre guests, however the need has arisen to offer
more family-friendly rooms and to cater for large groups on a budget,
such as NGOs, sports and religious associations. The new king and twin
bed configurations offer solutions for a variety of new markets.


Also due for opening in December is the R22m (€1.3m) 20-key extension
of the Peermont Metcourt at Khoroni Hotel, Casino and Convention
Resort in Thohoyandou. The extension will add 18 rooms to the current
87. In addition, Peermont is upgrading other properties to the tune of
R168m (€9.6m).


Premier Hotels recently announced plans for three new properties in
the next five years, in Umhlanga, Fourways and Sandton.


The City Lodge Hotel Group has no new properties on the drawing board,
and although it believes the market to be fully traded in most parts
of South Africa, it continues to keep an eye out for expansion
opportunities. Most recently, it opened a 148-room City Lodge in
Newtown, Johannesburg and a 90-room Road Lodge in Pietermaritzburg.



While Protea Hotels has no new South African hotels in the pipeline,
the addition of a 15-storey tower block at the Protea Hotel Umhlanga
in the third quarter of the year will add substantial capacity to the
beach resort. The project adds 119 bedrooms to the complement which
will total 240 on completion. Conference facilities hold capacity for
150 delegates. Recently the group boosted the Protea Hotel Edward in
nearby Durban by 30 rooms.


Last year Marriott International announced the signing of the first
Marriott-branded properties in South Africa, in partnership with The
Amdec Group, developers of the Melrose Arch precinct in
Johannesburg.

The 150-room Johannesburg Marriott Hotel
Melrose Arch and 200-unit Marriott Executive Apartments Johannesburg
Melrose Arch are expected to open in February 2018.