As part of the growing foreign interest in South Africa’s tourism and leisure industry, Golding Hotel Investment Consultants (GHIC) has concluded deals in excess of R220-million for the financial year ended February 2003, the group said on Tuesday.
This represents an increase of 76% over the previous year.
At the same time, according to GHIC managing director Joop Demes, a survey of 25 of the major hotel operators in the industry in the centres of Cape Town and Johannesburg reflected an average increase in revenue per available room of 25% to 35% for the 12-month period ended December 2002, compared with the previous year.
This greatly increased traffic in the main centres is having a positive spillover effect into other areas such as the Cape Winelands, and the eco-tourism or game farming areas of Mpumalanga, as well as the Garden Route area.
“While global instability is placing global hotel operators under tremendous pressure, the industry in South Africa is bucking this trend aggressively, further boosted by increased tourism and high-profile events such as the World Summit and Cricket World Cup,” Demes said.
“Delegates and visitors to two recent major international trade shows, the International Trade Show in Berlin and the World Trade Market in London, reconfirmed the huge interest in and popularity of South Africa as a tourist destination.”
Demes added that while it was still more cost effective for foreign investors to buy an existing operation than to build, it was exciting to see a growing trend towards new buildings being constructed, which include two 5-star country boutique hotels in the Cape Winelands, a 5-star resort hotel soon to commence on the Garden Route, and a boutique niche hotel operation.
“An added attraction is the government’s incentive for the hospitality industry of up to 30% rebate on capital expenditure for the construction of new buildings or the expansion of existing operations. This of course has further advantages in terms of creating employment and boosting the economy.”
He added that foreign investors in the South African hospitality and leisure market incorporate mainly two different buyer profiles.
First, there was the emergence of owner/manager investors from the main countries which feed South Africa from a tourism point of view, typically the UK and Germany, who find their home markets overcrowded and are seeking a guest house or country hotel at an investment of between R4-million and R5-million up to R20-million.
Then there were corporate investors from America, the UK and further afield who are prepared to invest from R20-million upwards. – I-Net Bridge