Africa -  South Africa - Durban

For a comprehensive review of the Africa market, click below:
HVS In-Depth Africa Hotel Valuation Index:   2016 | 2015 | 2014

Ramaphosa’s proposals to revitalize the country in 2018 sounded promising and following the excitement of a change in presidency, the GDP grew by 2.6% and 1.4% in the last two quarters of 2018 respectively. 2019 saw a sharp decline in GDP in the first quarter of just over 3% reflecting in part the effects of Eskom’s power cuts on mining and manufacturing. While there was a growth of over 3% in the second quarter, the South African Rand and the general economic sentiment remains bleak amidst the global economic slowdown and the USA China trade war.

National elections took place on the 8th May 2019 and the ANC won with 57.5% of the count which was its worst performance by the party in any national election. There were just a few service delivery protests leading up to the elections and on election day, otherwise it was a peaceful turnout.

Durban’s King Shaka International Airport (KSIA) is the fastest growing airport in South Africa with international arrivals increasing by over 10% during the high season (October to April) 2017/2018 to 2018/2019. Even more impressive was the increase of international passengers from November to December 2018: over 42%. British Airways’ direct route between London Heathrow and KSIA that was introduced in October 2018 has been a great incentive for people to choose this route to come into South(ern) Africa. Even with a weak currency, soaring petrol prices and increased VAT, domestic travel to Durban was almost 15 times higher than the international passenger numbers.

Just weeks after the Tourism Indaba in Durban this year landowners Tongaat Hulett Developments signed a R1 billion deal with Club Med to build their first luxury resort in South Africa in Tilney Town 10 km from King Shaka Airport. There are only 3 other Club Meds in three other African countries: Morocco, Tunisia and Senegal. This one in southern Africa is planned to open in 2022 with 350 rooms and 50 villas.

Duban’s beachfront promenade extension is nearing completion. The R35bn Point Waterfront development will be undertaken in three phases over the next 15 years. In addition, a R200 million redevelopment of the Durban Cruise Terminal is on its way and is planned to be completed by March 2020. A Radisson Blu with 207 rooms and a Hilton Garden Inn with 203 rooms are both scheduled to open next year in Umhlanga. All of this will be happening alongside the Oceans Umhlanga project as mentioned in the previous HVI.

The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide. Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the hospitality investment market.

In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.

Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide insights on the likely trajectory of decline and recovery for hotel values.

For the Latest Information and Analysis on the Impact of COVID-19Click Here

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For more information, please contact:

Tim Smith, MRICS
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Rishabh Thapar
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