SA Hotel sector experiencing double digit growth increase

Source: Tourism Business Council of South Africa

Having over the past five years facilitated well in excess of R3.5 billion in investment in the hospitality industry, Pam Golding Hospitality - a member of the Pam Golding Property group - is ideally positioned to capitalise on future growth on the industry in Southern Africa.

"Positive growth in the hotel market is an ongoing trend. During 2007, and for the second year in succession, the SA hotel market as a whole experienced a double digit increase in Revpar (revenue per available room) with 2007 up by a very impressive 16.3 percent compared to 2006. During 2007 and compared with the previous year, 5-Star hotels increased their Revpar by 19 percent, while the overall Johannesburg Revpar growth was 25.5 percent - as quoted by the Deloitte Hotel and Benchmark Study," comments Joop Demes, MD of Pam Golding Hospitality.

"In the current year (2008) this positive trend is continuing at an increasing rate and we are seeing double digit revenue growth for the third year successive year with the SA hotel market as a whole again up by an outstanding 19.3 percent for the first six months ended 30 June 2008 compared with the same period in 2007. Greater Johannesburg is up by 25.7 percent, with a record 36.1 percent increase for the hotels located at OR Tambo Airport. Indicative of the fact that business is thriving in the hotel industry in South Africa as a whole -with no slow-down on the horizon - is the fact that the month of June 2008 reflected a healthy increase of 15 percent over June 2007."

Pam Golding Hospitality (PGH) incorporates four separate business entities: Pam Golding Hotels (formerly Golding Hotel Investment Consultants) - Southern Africa's leading facilitator in the hotel industry; Pam Golding Hospitality & Tourism Consulting - handling feasibility studies, valuations and research assignments; Pam Golding Lodges and Guesthouses - specialising in the sale of lodges, guesthouses and boutique hotels mainly priced from R5-R50 million and ranging in size from eight to 40 rooms; and Pam Golding Restaurants - concluding the lease and sale of restaurant businesses and restaurant properties.

Says Demes: "Our outlook is extremely positive and for the first five months (March-July 2008) of our current financial year PGH has already achieved record turnover which is double that of the same period last year and we envisage it will represent triple growth by the end of the financial year. Among a wide variety of transactions and mandates currently in progress we have been awarded a very prestigious appointment in spearheading a detailed research paper for the development of an international theme park in KwaZulu-Natal. Incorporating a mixed-use development with 20 large hotels, two different large theme parks of an international standard and size and 120 000 residences, this is to be launched by a well-known international group at a total investment in excess of USD4 billion.

"In addition we have been engaged by one of our South African clients, Protea Hotels, to assist with a variety of feasibility studies and facilitation for projects in which they are currently involved. These include 43 new hotel projects which are at various stages and notably, predominantly located in South Africa," says Demes.

Following a successful Hospitality Investment Conference Africa (HICA) in 2007, an event initiated by the Tourism Business Council of South Africa in partnership with PGH, the latter has again been tasked to assist with the organisation of HICA 2008, which takes place from 28-30 September at the Hilton Sandton Hotel, Johannesburg. Creating a forum for discussion, the establishment of best practice and high level networking opportunities, HICA attracts investors, developers, hotel operators, financiers, consultants, architects and design specialists in both the tourism and hospitality industries.

Comments Demes: "Our role is to assist with the concept for topics, compilation of the various discussion panels and in identifying suitable sponsorship. An important element of this year's conference is that it will be far more interactive with an emphasis on panel discussions and delegate participation."

While topics include business linkages in tourism, climate change and carbon off­setting, key presentations will focus on where is the global hotel industry heading, facilitating an adequate investment climate in Africa, and African readiness for the 2010 FIFA World Cup. Of interest is that Demes has been tasked by the Tourism Business Council of SA to research whether there is an acceptable return on investment to be earned in the hotel industry in South Africa, incorporating the type of hotel (from budget to 3-, 4-or 5-Star hotel) and location.

"In response to our research questionnaire we have received replies from 160 hotels around the country - representing 23 478 rooms in total and incorporating virtually all the major hotel operators -and the outcome of this project will set the tone for an extremely interesting and revealing panel discussion with local and international industry experts. Importantly, this panel will also be tasked with making suggestions as to how we can address the issue of increasing cost of capital and construction, thereby improving return on investment," adds Demes.

For further information contact Joop Demes, MD of Pam Golding Hospitality on 082 883 2231 or email jdemes@goldinghotels.co.za.