SA hotel room revenue only slightly up. Pexels

A focus on business tourism is the key to unlocking the full potential and profits of Africa's hotel rooms.

PwC’s ninth edition of the Hotels Outlook: 2019-2023 was recently released and includes information about hotel accommodation in South Africa, Nigeria, Mauritius, Kenya and Tanzania.

Hospitality Industry Leader, PwC Southern Africa, Pietro Calicchio says: “While leisure is an important component of the tourism industry, governments are taking steps to develop more diverse initiatives, fueled by business tourism and conferencing. Business tourism is a critical component to the growth of African economies – business events are increasingly being held in a number of diverse locations across the continent."

In SA hotel room revenue rose only 0.5% in 2018, its smallest increase during the past six years. 

And growth is expected to pick up beginning in 2019 and is forecast to expand to R19.7 billion in 2023, up 3.3% compounded annually, from R16.7 billion in 2018. 

This relatively modest increase will reflect the expectation of low ADR (average daily rate) growth, as growth in online booking and the increasing use of travel sites promotes price shopping.

Growth in foreign visitors to South Africa dropped by 1.7% in 2018, down from the 2.4% gain in 2017 and the 12.8% increase in 2016. 

The slowdown in large partly reflected concerns about the drought in Cape Town and the possible approach of Day Zero when Cape Town would run out of water. 

In South Africa, the number of available rooms is expected to increase at a 1.2% compound annual rate to 67 200 in 2023 from 63 400 in 2018. 

With guest nights projected to grow faster than available rooms, the occupancy rate for hotels will increase to a projected 61.1% in 2023 from 59.2% in 2018.