LANDMARK: The Mount Nelson Hotel entrance in Orange Street. Picture: Jason Boud/African News Agency (ANA)
CAPE TOWN - Cape Town has remained the gem of South Africa’s hotel sector, despite the water shortage crisis knocking the city’s hospitality industry.

Pietro Calicchio, industry leader for hospitality and gaming for PwC Southern Africa, said Cape Town was still the main tourist drawcard in the country although the city had experienced a slower growth in foreign tourism last year.

Calicchio said the growth in guest nights dropped by 1% last year after growing by more than 7% in 2016.

He said it was difficult to state that one factor, such as the water crisis and the possibility of a Day Zero scenario, had been responsible for cancellations because the market was coming off such a high base.

But Calicchio said the average daily rate increased by 7% last year, which was much higher than the average for the total market although this growth was slower than the 11% achieved in 2016.

Calicchio was speaking at the launch of the PwC’s 2018 Hotels Outlook/2018-2022 report.

He said there was a slowdown in foreign tourism growth in Cape Town last year compared to 2016. But the hospitality industry alone had contributed R40 billion to the Western Cape economy and the city and its many attractions and hotels “remain very much open for business”.

Calicchio said the recent announcement by the City of Cape Town that Day Zero had been pushed out by at least two years was great news.

He said hotels were taking steps to conserve water, and water consumption in Cape Town had reduced significantly over the past 12 months.

Calicchio said a desalination plant that converted two million litres of seawater into potable water a day was in place at the V&A Waterfront.

“The One & Only Cape Town went from using 220 000 litres of water a day to 60 000 litres a day, which is an amazing feat,” he said.

Calicchio said guest nights dropped by 1% in Johannesburg last year, but room rates edged up by 3% and a modest increase in room revenue.

“The market appears to be on the rebound in 2018 as economic conditions pick up,” he said.

Calicchio said guest nights were flat in Durban and average day rates dropped by 2% last year.

The PwC report said South African hotel room revenue was expected to grow to R21.8 billion in 2022, a 5.6%t compounded annual growth from the R16.6bn last year. An additional 2 900 rooms were expected to be added over the next five years and it forecast a continued improvement in occupancy rates of 62.5%t in 2022 from 61% last year.

The report said international visitor numbers to South Africa continued to grow, with a 2.4% increase overall last year; it projected a 5.3% increase in the number of foreign visitors and domestic tourism this year, with the total number of travellers to South Africa expected to reach 19.5 million by 2022 from the 16m last year.

The number of Chinese visitors, surprisingly, dropped by 17% last year after increasing by 38% in 2016.

The number of travellers from India rose by 2.7% last year, well below the 21.7%% increase recorded in 2016.

Of non-African countries, the UK was still the largest source of visitors to South Africa at 447 901 last year.

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Cape Argus