Despite the recent technical recession and a drought that crippled many areas of Western Cape business, foreign tourism rose by 2.4 percent in 2017. Photo: Supplied

DURBAN - Despite South Africa’s recent technical recession and a drought that crippled many areas of Western Cape business, foreign tourism rose by 2.4 percent in 2017, building on a 12.8 percent increase in 2016. 

Domestic travel showed the greatest increase since 2014, rising 4.2 percent in 2017 – well above the gains of less than 2 percent in 2015/16.  

"The odds have been against us, what with a constrained economy, a drought, tourism visa issues and questions around electricity supply," said Wayne Troughton, the Chief Executive of HTI Consulting. 

Troughton added this despite this they have never before witnessed the levels of interest that they are seeing right now from international and local operators wanting to expand or launch into, specifically, Cape Town, with the CBD being high in demand. 

Cape Town remains the country’s top tourist destination. The city was named the World’s Leading Festival and Events Destination at the 2018 World Travel Awards in Lisbon, and the International Congress and Convention Association ranked the Mother City as the best business tourism city in Africa.

Demand for hotels in Cape Town has grown exponentially since 2012. Between 2012 and 2017, the occupancy and average daily rate (of the Cape Town market as a whole grew at a compounded annual growth rate of 3 percent and 10.7 percent respectively. 

Troughton said "Cape Town’s current hotel offering covers a broad variety of markets, including corporate, government, leisure and conferencing/ groups, so we’re trying to encourage developers to cater for several of these groupings as a means of limiting their risk". 

Although the Waterfront remains the number-one area of demand for development, the Foreshore is witnessing unprecedented interest. The expansion of the Cape Town International Convention Centre, along with the opening of the new Netcare Christiaan Barnard Memorial Hospital, has triggered further developments: The Onyx, a new apartment-style residential hotel, a 200-room Cape Town Marriott Hotel Foreshore and a 150-room Residence Inn by Marriott Cape Town Foreshore, both of which will be built at the Harbour Arch. 

Interest from private developers is growing too, notably with the soon-to-open Gorgeous George, a 32-room luxury boutique hotel in two refurbished heritage buildings on St George’s Mall.

Managing Director of Gorgeous George Wessel Botes comments "Experience has shown that once redundant inner-city buildings are brought back to their former glory and turned into stunning design-led hotels, much like what ACE Hotels are doing in London’s Shoreditch or SOHO House in Manhattan’s Meat Packing District, those areas begin to attract a whole new tourism market, and one that’s far more appreciative of design, culture, art, fashion, architecture and so on. Cape Town’s Strand Street, St George’s Mall and the East City Precinct offer that". 

Troughton says, “Many developers are waiting to see what will transpire post next year’s elections before making their first big move. Given that the development pipeline is somewhat small at the moment, we expect this to tick upwards within the next two to three years. 

BUSINESS REPORT ONLINE