Africa -  South Africa - Cape Town

The total amount of tourists arriving in South Africa went up by about 13% in 2016 to 10,044,163 and the trend continues with an all-time high of 1,040,534 tourists (excl. tourists in transit) in January of this year, according to Statistics SA. The number of tourists travelling to South Africa has been increasing since the strict visa restrictions were eased and the devaluation of its currency. However, South Africa still needs to address a few challenges to keep the positive growth of tourist arrivals.

A continuing drought, low commodity prices and weak demand from the nation’s main export partners caused South Africa’s economy to experience a GDP growth of 0.3% in 2016 (the lowest GDP growth since 2009 recession), followed by a decline of 0.7% during the first quarter of this year. The removal of deputy finance minister Mcebisi Jonas and finance minister Pravin Gordhan from the governments’ Cabinet by President Jacob Zuma in March, resulted in the Rand’s exchange rate to drop and Standard & Poor’s to downgrade South Africa’s investment status to “junk”.

The future of SA’s tourism is looking promising though as the Rand has recently strengthened again and more than 2500 rooms are expected to be added over the next 5 years, of which a new Radisson Blu, Radisson Red, Sun International, Marriott, Tsogo Sun and Ibis are part of. The World Bank predicts a GDP growth of 1.1% in 2017 and 1.8% for 2018.

Cape Town remains South Africa’s most popular destination when it comes to domestic and international visitors – showing a new record: Cape Town International Airport reached 10 million passengers on the 28th Dec 2016 since the beginning of the year for the first time. Numerous planned hotel openings and an increased capacity for international direct flights through Ethiopian Airlines, Kenya Airways, KLM, Air France, Lufthansa, British Airways, SA Airlink and more show that investors think the same. The luxurious and exclusive Silo opened its doors on the 1st March this year and the very first Radisson Red in Africa is planned to be ready for business in September in the newly developed ‘Silo District’ of the V&A Waterfront. The local chain Tsogo Sun caught up to the trend and is currently developing a 504-bedroom hotel complex which is aimed to be completed in September this year as well. This large amount of new supply will cause occupancy levels to drop in 2017 and it will take some time for the supply to be absorbed and the market to pick up again, but growth is expected to look positive for 2019 and 2020 again.

Exchange Rate:

Exchange Rate 2015 Exchange Rate 2016 Change 2015/2016 Exchange Rate 2017 Change 2016/2017
US$ 1 1 0
South Africa - Cape Town 0.0666 0.07246 8.8% 0.07077 -2.3%

Change In Value For Market:

Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

South Africa - Cape Town RevPAR Change

South Africa - Cape Town RevPAR

Year RevPAR
2010 83.19
2011 75.98
2012 75.75
2013 75.97
2014 79.01
2015 78.15
2016 83.14
2017 92.39

For more information, please contact:

Tim Smith, MRICS
[email protected]
  • +27 797 342296 (w)
Laura Dutrieux
[email protected]
Sofie Otto
[email protected]