News Research

SA’s hotel sector faces an uphill recovery battle

South Africa’s hotel sector continues to fight for its recovery with total industry income in January 2022 -36.7% below that of January 2020’s income and December 2021’s total hotel income -39.8% below December 2019.

However, according to John Loos, Property Sector Strategist at FNB Commercial Property Finance, hotel income has recently outpaced the growth of income in both the guest house and guest farm categories as well as camp sites and caravan parks.

In January 2022, the national occupancy rate was 27.2%, still well below 46% for January 2020 and this isn’t its only restriction; a more constrained financial environment plays a part too with the average hotel income per stay in January 2022 -19.6% down on January 2020’s level.

While FNB anticipates gradual improvement during 2022 on the back of relaxed lockdown regulations and a stronger economy, a number of factors continue to constrain the industry including financially pressured domestic tourists, reduced business travel, and restricted foreign tourism.