Speaking during the recent Future Hospitality Summit Africa, Philip Wooller, Area Director: Middle East and Africa for Smith Travel Research, said: “After the euphoria of the past two years, the hotel industry is now returning to its fundamentals: supply and demand.”
But, he added, global occupancy levels are under pressure due to new openings.
“Since 2019, global hotel supply has grown by 12.8%. That’s over 2.5 million additional hotel rooms worldwide. To maintain the same occupancy as 2019, the industry needs to sell an extra 925 million rooms every year,” Wooller said.
One million additional rooms are currently under construction around the world with Asia accounting for over half of these. Around 5%, or 31 000 rooms, are under construction in Africa.
Global occupancy rates reached 68% in 2024. Despite slower growth, revenue per available room (REVPAR) is expected to grow between 2-3% globally in 2025.
The African picture
“Africa remains unmatched in its complexities, unpredictability and market nuances. If you think you’ve seen it all, it will prove you wrong every time,” Wooller said.
Occupancy in Sub-Saharan Africa dipped 2% from 2023 to 58% in 2024. The average daily rate (ADR) in Sub-Saharan Africa grew by 19% between 2023 and 2024, reaching US$147 (€127).
At city level, Cape Town reached an average room rate of US$158 (€136) in 2024 and Nairobi US$124 (€107). In comparison, New York reached US$319 (€275), Paris US$371 (€320), Dubai US$188 (€162) and Beijing US$76 (€65).
South Africa in detail
Wooller said South Africa had a total of 10.6 million rooms available between January and April 2025 with a 59.6% occupancy rate. And, while room supply has shown marginal growth of 3.1% since 2019 and 1% year-on-year, there is “a lot of growth in the average room rate, which has generated a lot of additional revenue from a REVPAR point of view.”
REVPAR has increased by 50.4% since 2019 and the ADR has grown by 53.7% over the same period.
Cape Town recorded occupancies of 74% between January and April, and its ADR has climbed by 83.7% since 2019. REVPAR is up by over 92% and room revenue by 100% since 2019.
“Cape Town is doing very, very well, mainly pushed up by the five stars. The five stars do push up the average room rate,” Wooller said, adding that the city recorded an average five-star room rate of US$285 (€246).
In 2024, Cape Town’s occupancy rate reached 67% while it was 59% in Gqeberha and 45% in Johannesburg.
The 2025 data for January to April shows modest growth in specific areas of Gauteng with Sandton (11%), Johannesburg (4%), Pretoria (4%) and the East Rand (6%) increasing from the same period the previous year.
KwaZulu-Natal largely saw occupancies decline over the same period although average room rates grew by 8% in the Drakensberg and Midlands, 11% in Durban and 5% in Zululand. Only Umhlanga bucked the trend, showing marginal occupancy increases of 1% and a 2% decline in the daily rate.
By Bianca Capazorio
