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How The Capital Hotels, Apartments and Resorts is making the most out of South Africa’s tourism potential
According to the Department of Tourism, the country hosted two-million visitors in the first quarter of 2023 and more than 5.8-million last year. The first quarter of the year also saw foreign direct spend hit an impressive R25.3-billion, a 143 per cent increase compared to the same period in 2022.
With this number only set to grow, it is clear that tourism is back. Thanks to this influx of international travellers and an astute acquisitions plan, groups like The Capital Hotels, Apartments and Resorts are in a prime position to take advantage of tourism’s purple patch.
Marc Wachsberger, chief executive officer of The Capital Hotels, and Apartments and Resorts, said: “We’ve never been the type to waste a crisis, we used the pandemic as an opportunity to strengthen our position by investing in new acquisitions and builds. Now tourism is booming again, we’re well placed to benefit.”
The weakness of the Rand combined with a relatively low cost of living in South Africa has translated into value for money that allows foreign visitors to enjoy luxury accommodations, dining, and experiences at a fraction of the cost compared to international opportunities. As the world embraced post-pandemic travel, this led to unprecedented growth in the sector.
Bouncing back from the pandemic
While the Covid-19 pandemic took an incredible toll on the hospitality industry, businesses like The Capital Hotels, Apartments and Resorts managed to weather the storm by making bold decisions. “We built our Mbombela property during Covid-19 and that decision has paid off. The property now trades at an annual occupancy of 80 per cent in an area where almost no new hotels have been built since the 2010 Soccer World Cup and where our competitors are sitting at 53 per cent occupancy.”
In Kwa-Zulu Natal, for example, the group acquired a property in business rescue during the pandemic and pumped R100-million into restoring its 5-star status. The Capital Zimbali Resort now trades at an annual occupancy of 72 per cent, with extremely popular conferencing facilities and restaurants. Throughout the process, not a single staff member was retrenched. In fact, an additional 150 were hired.
South Africa’s ability to control the spread of Covid-19 and its aggressive vaccination campaign instilled confidence in travellers, leading to an explosive demand for travel once restrictions eased. One of the most surprising things has been the influx of travellers from the rest of the continent. African travellers spent a collective R9.3-billion in Q1 of 2023, with our neighbours making up six of our top 10 source markets for travellers. Europeans spent R10.8-billion during that time and Americans splashed R2.6-billion, putting them 28 per cent above their 2019 spend.
The business of travel
In addition to traditional leisure tourism, the revival of business travel is driving a surge in demand for accommodation and conferencing venues in South Africa. The demand for rooms, coupled with a limited supply, has rejuvenated a Covid-impacted hospitality industry. Hotel chains that have invested in state-of-the-art conference rooms, reliable high-speed internet and loadshedding contingencies have put themselves in the perfect position to capitalise on future growth prospects. Business and leisure travel, or ‘bleisure’, is also seeing significant growth.
“The Capital 15 on Orange is another example of how our Covid acquisitions have come good for us. We spent R30-million getting it back to five-star standard, including opening the new Grotto Spa. That property now trades at an annual occupancy of 76 per cent, and is performing extremely well in conferencing, short-term letting and international travel markets,” Mr Wachsberger explained.
The country’s natural wonders, from the majestic Table Mountain, to the vibrant Kruger National Park, have never been more alluring to international tourists seeking respite after a prolonged period of confinement. The Capital Hotels, Apartments and Resorts seized this golden opportunity by ramping up marketing efforts, ensuring enhanced safety protocols, and expanding its portfolio to meet the surging demand.
Sites like The Capital Mbombela, The Capital Zimbali Resort and The Capital 15 on Orange speak to how the group has managed to skilfully take advantage of a pandemic, a weak Rand and South Africa’s attractiveness to business and leisure travellers. This, in turn, has fuelled impressive levels of growth that look set to be maintained and built upon in the future. With tourism booming, companies with astute business plans will not just bolster their bottom lines but also help boost the South African economy.
