Hotels are the driving force behind the accommodation sector’s post-pandemic recovery. This has been revealed by Stats SA’s December 2022 tourist accommodation report, which found that accommodation income increased by 46,7% compared with the fourth quarter of 2021, and hotels were the biggest contributors.
Hotels contributed 63,3% to this figure, which translates into R3,5bn, while other accommodation contributed 33,4%, or R2,8bn.
The figures for December 2022 are equally positive. For the first festive season since the start of the pandemic without COVID-19 restrictions in place, the report shows a strong recovery of 43,5% compared with the year before.
Income was derived from a 19,9% increase in the number of stay unit nights sold and an increase of 19,7% in the average income per stay unit night sold. Here, the biggest contributor was once again hotels at 62,8%, while other accommodation contributed 27,8%.
In terms of hotel occupancy rates for December, Stats SA reported occupancy levels of 41,1%, however FEDHASA’s national chairperson, Rosemary Anderson, pointed out that the hospitality association’s members reported significantly higher occupancy levels, of an average of 65%, with many hotels very close to pre-COVID levels and a number exceeding 2019 room occupancy rates.
Several challenges remain
Indications are that growth and recovery are continuing, although tourism has yet to recover to pre-COVID levels. Several challenges are constraining growth, chief among them the electricity crisis, which is putting pressure on hospitality businesses of all sizes.
“Food and beverage is not showing growth at the level we had hoped. In addition to load shedding, other impediments include the higher cost of living and food inflation,” said Anderson.
“And while we welcome the news that hotels are driving recovery and occupancy is up, we believe this could hinge on their ability to invest in an alternative energy supply, such as generators and solar installations. Tourist confidence would also lean towards hotels for this reason.”
She said hotel revenues were, however, being depleted by the running costs of keeping the lights on, giving the example of a large FEDHASA member hotel in Johannesburg having spent R1 million on diesel in December.
At the same time, smaller accommodation providers do not have the capital to invest in such solutions. “They cannot survive load shedding long-term. The situation is critical, and we urge Government to expedite energy security interventions now that a state of disaster is in place.”
Water supply issues
Anderson noted that reliable water supply was also becoming crucial. “One of our members on the South Coast spent R1,5 million in December alone, bringing in bulk water to cover for the collapse of water provision from the local municipality. This is financially not sustainable and is putting the hospitality industry in the area at risk.”
The World Travel and Tourism Council has predicted that the sector will drive South Africa’s economic recovery over the next 10 years and grow at an average rate of 7,6%. The industry is also expected to create 800 000 jobs over the next decade.
“However, this growth is threatened by the lack of basic services,” Anderson said. “We must also ensure that our destination is safe.
“If Government could create a conducive environment for tourism by providing reliable bulk services, removing industry red tape, creating an efficient e-visa system, and reducing crime, tourism could be the answer to unemployment and create more than 800 000 jobs – it could create millions of jobs. While we remain hopeful for 2023, we need to stay focused on these barriers to travel, hospitality and tourism, and continue motivating for change,” she concluded.
