The South African tourism industry is experiencing a remarkable comeback, driving an increased interest in hospitality-related investment, Cape {town} Etc reports.
After a tumultuous period marked by the pandemic, investors are flocking to opportunities within the sector, buoyed by promising signs of recovery and growth.
According to Peter Rowell, a hotel broking specialist with the Seeff Property Group, this year has witnessed significant successes that reflect returning confidence in the hospitality market.
Key performance indicators reveal an encouraging trend; hotel occupancy rates, average daily rates (ADR), and revenue per available room (RevPAR) are all on the rise.
Recent data from May 2025 indicates that the national hotel occupancy rate stands at 59.5%, with an impressive 16.0% year-on-year increase in RevPAR. However, the Cape region is leading the charge, boasting an average occupancy rate of 72.5% and a remarkable 20.1% year-on-year increase in RevPAR as of April.
This growth isn’t confined to South Africa. The Sub-Saharan African hospitality sector is thriving, driven by an upswing in both business and leisure travel.
Johan Cronjé, Regional Vice President for Sub-Saharan Africa at Marriott International, commented on the vibrant energy within the region, signalling an optimistic outlook for future developments.
High-end resorts and hotels are experiencing a boom, with Southern Sun recently reporting a rise in earnings, particularly in the Cape and Gauteng regions. Major international brands like Radisson, IHG Hotels & Resorts, and Protea Hotels by Marriott are expanding their footprints in South Africa.
The construction of the first-ever Club Med resort north of Durban further exemplifies the confidence in the sector’s potential.
Rowell notes that South Africa remains one of the most attractive destinations in Sub-Saharan Africa, with the Cape regularly acclaimed as a premier international location. ‘The region is frequently celebrated for its beauty and hospitality, often winning awards from leading travel publications such as Conde Nast Traveler and the Telegraph Travel Awards.’
Investment opportunities are vast, ranging from major hotel chains to boutique establishments, five-star guest lodges, and picturesque wine estates. In recent years, there has been a notable influx of international investors, particularly from countries such as Britain, France, Germany, and more recently, the Middle East.
With improving profitability and growth trajectories, investor confidence in the sector continues to soar, presenting opportunities for diversification within investment portfolios.
Rowell mentions that hotels and hospitality products are often marketed off-book, where investors might express interest in targeting specific brands or establishments without public disclosures.
A crucial aspect of the hotel investment landscape is the complex nature of these assets, which requires a specialised approach to valuation and sales, factoring in financial performance, location, property quality, and management.
Rowell emphasises the significance of trust, discretion, and confidentiality in handling off-market hotel transactions, noting that these elements are paramount in avoiding disruption that could jeopardise potential deals.
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Picture: Seeff Property / Supplied
