By Zweli Mokgata

The hospitality industry expects a slow recovery this year after three years of straight decline.

South Africans are still reeling from the 2008/2009 recession and hotel visits reflect the conservative spending culture that travellers have adopted.

While hotel occupancies are slowly improving from last year, the spending patterns have changed, says Martin Jansen van Vuuren, a director at Grant Thornton Strategic Solutions “The top end of the market has definitely experienced a decline over this period.”

According to the latest Statistics SA data for last year, hotel occupancy rates between October 2009 and October 2010 were depressed, hovering between the low 50s and the high 40s.

This was after an average rate of 71% in 2008 and 61% in the following year.

The year’s low was reached in January 2010, when occupancy rates were 43,7%. Rates peaked in June at 57,4%.

Jansen van Vuuren says it is not just domestic travellers who have been opting for more economical options: “Foreign tourists have been trading down from five-star to three-star hotels. The strength of the rand has played a role in that,” he says.

Self-catering accommodation in the Western Cape was fully occupied during the December holiday period, according to Jansen van Vuuren, but Cape Town tourism didn’t experience an increase in overall occupancies, with a decline in the higher end.

In the nine months to November, fivestar occupancy countrywide fell by one percentage point to 59%. The lowest fivestar occupancies were in Durban.

Ironically, it was Durban that experienced the highest occupancies at Southern Sun hotels during December.

Southern Sun MD Graham Wood says Cape Town reached nearly 90% occupancy rates on peak days and Durban hotels were filled to capacity during the vacation period. Johannesburg hotels were almost deserted as residents abandoned the city.

“We had a good festive season in Durban, particularly between December 20 and January 10, a period that was significantly up from last year.”

Wood says the guests were almost all domestic holiday makers and that there were very few international travellers. Cape Town occupancies were also up from last year, but they were not as high as was expected because of the decline in business from international travellers.

Not only have international visitors stayed away from SA because of strained budgets, high air fares and the strong rand, South Africans have also opted to stay closer to home.

Long-distance trips for residents of Gauteng, such as to Cape Town, have been replaced by more affordable holidays within reasonable driving distance, such as the Kruger Park and the Drakensberg, says Jansen van Vuuren.

Looking ahead, Wood says: “The first six to nine months will show no big pick-up. Only when corporate travel increases will we see a significant rise.”

The dual effects of technology and tighter travel budgets have conspired to keep midyear business travel from picking up, but Wood expects a gradual recovery.

“People are definitely thinking of teleconferencing and newly introduced high-definition tele-presence applications,” he says.

Protea Hotels group marketing manager Nicholas Barenblatt says: “This year will remain challenging as markets haven’t fully recovered from the effects of the global recession.

“The traditional migration of the domestic holiday makers from the north to the coast is ever present; however, the lead time for bookings was shorter this year than in previous years.”

Source: Financial Mail