South African Hotels Lead Growth in Hospitality Sector in Q1 2023

ACCORDING TO STATISTICS SOUTH AFRICAN HOTELS, THE HOSPITALITY SECTOR IN SOUTH AFRICA EXPERIENCED CONTINUED GROWTH IN THE FIRST QUARTER OF 2023, WITH HOTELS LEADING THE WAY IN THE ACCOMMODATION SECTOR. WHILE THE FOOD AND BEVERAGE SEGMENT REMAINS UNDER PRESSURE, BAR SALES HAVE SHOWN SIGNIFICANT GROWTH.

According to the latest report from Statistics South Africa, the hospitality sector in the first quarter of 2023 continued to experience growth, with hotels leading the way in the accommodation sector compared to the previous year and month. In February, income from accommodation increased by 59.4%, an improvement of 3.6% from January. Income from hotels showed positive growth, increasing by 69.1%, which was a rise of 6.2% from January 2023. The increase in the three months that ended in January and February 2023, compared to the previous year, was 46.7% and 51.5%, respectively, with hotels contributing 60.3% and 65.1%, respectively.

While the food and beverage segment has shown some growth, it continues to be under pressure. In February, food sales decreased by 1% compared to January, but they were up by 13.8% from December’s 13.6%. The total increase for the three months that ended in January and February 2023 was 15.5% for January and 15.8% for February. Restaurants and coffee shops were leading the way with a 15.7% increase in January and a 16.4% increase in February. Bar sales have shown significant growth, increasing by 35.5% compared to 2022.

FEDHASA National Chairperson, Rosemary Anderson, expressed her delight at the hospitality sector’s strong growth, particularly the 35.5% increase in bar sales, which she believed demonstrated the industry’s resilience and ability to overcome the pandemic’s challenges. She cautioned that the data should be viewed within context and that profit margins were being squeezed due to rising food costs, electricity challenges, and additional overhead costs like diesel for generators. Furthermore, businesses have to contend with water shortages or an erratic water supply, particularly in the south coast of KwaZulu-Natal.

Anderson called on local municipalities and the government to improve basic infrastructure, such as electricity and water supply, to ensure a positive guest experience and to position South Africa as a desirable destination for both local and international visitors.

She emphasized that these basic infrastructural challenges were putting additional pressure on the hospitality industry, which was still struggling to recover from the pandemic and create jobs while delivering a “business as usual” experience to guests.