South African Hotels Achieve Record-Breaking RevPAR during Festive Season

Record RevPAR Surge in South African Hotels
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SUMMARY –  SOUTH AFRICAN HOTELS ACHIEVE RECORD-BREAKING REVPAR, WITH A 46% GROWTH IN DECEMBER 2022 COMPARED TO THE PREVIOUS YEAR, DRIVEN BY HIGH OCCUPANCY RATES AND INCREASED AVERAGE DAILY RATES. WHILE THE INDUSTRY SHOWS PROMISING RECOVERY, CHALLENGES SUCH AS ECONOMIC HEADWINDS AND RISING INFLATION MAY IMPACT FUTURE GROWTH.

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In December 2022, independent hotels in South Africa saw a notable increase in RevPAR (revenue per available room), with a remarkable growth of 46% compared to the same period in the previous year.

On December 31, 2022, the average RevPAR reached R2,023, marking the highest volume ever recorded by RoomRaccoon, a hotel management software company that launched its South African Hotels division in November 2017.

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Factors Driving the Record-Breaking Figures

This outstanding achievement can be attributed to two main factors. Firstly, hotel occupancy skyrocketed to 79% on December 31, reflecting a significant surge during the new year period. Secondly, there was a noteworthy 20% increase in ADR (average daily rate), rising from R2,116 in 2021 to R2,560 in 2022.

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Industry Recovery and Insight from Niels Verspui – Niels Verspui, market head of RoomRaccoon South Africa, commented on the data and the industry’s recovery. He emphasized that this year served as a turning point for South Africa’s travel and tourism sector. The increase in RevPAR indicates that hotels are effectively capitalizing on high occupancy rates during the festive season, compensating for revenue lost due to the pandemic.

Continued Momentum and Future Challenges – RoomRaccoon’s data, which covers over 4,500 rooms in boutique hotels, B&Bs, and guesthouses across the country, indicates a positive trend extending into 2023. Both the average occupancy rate and RevPAR continue to exceed the figures from December 2022.

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However, Verspui warns about the potential impact of strong economic headwinds and rising inflation on the pace of recovery in the new year. He expects ADR to increase further to offset inflation and rising operational costs.

Utilizing Market Data and Revenue Management Tools – In uncertain economic times, Verspui advises hotels to closely monitor market data to capture demand and maximize revenue. He suggests leveraging revenue management tools that automate rates across distribution channels, ensuring optimal pricing for time-limited inventory to maximize revenue.

 

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