Africa -  South Africa - Johannesburg

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.

In Johannesburg, Hotel establishments experienced a decrease RevPAR in 2016 due to oversupply in rooms and an increase in consumer price inflation which means that Revenue Managers cannot push the rates too high. But a predicted increase in average rate and value per room in 2017 show that the market is picking up again and the oversupply will slowly be absorbed over time.The biggest South America airline company, LATAM Airlines, launched a direct flight between São Paulo and Johannesburg in October 2016 offering three flights weekly, tapping into the opportunities that the business hub of South Africa holds. Furthermore, Minor Hotels, the major growing brand in Africa, opened their regional office in Johannesburg and the Hyatt Regency got sold for 36 million US$ in Feb 2017 which shows interest in the country.

Exchange Rate:

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

Change In Value For Market:

Legend
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 - Johannesburg RevPAR Change

South Africa - Johannesburg RevPAR

Year RevPAR
2010 64.51
2011 51.95
2012 51.53
2013 45.27
2014 40.70
2015 34.17
2016 30.38
2017 (f) 36.53

For more information, please contact:

Tim Smith, MRICS
tsmith@hvs.com
  • +27 797 342296 (w)
Laura Dutrieux
ldutrieux@hvs.com
Sofie Otto
sotto@hvs.com