HAVING predicted - just over a year ago - that South Africa's hospitality and leisure market was poised to benefit from greatly increased investor confidence in the country, particularly from overseas investors, Golding Hotel Investment Consultants (GHIC) concluded deals in excess of R220 million for the financial year ended February 2003, which represents an exceptional increase of 76% over the previous year.

Joop Demes, managing director of GHIC, said: "While global instability is placing global hotel operators under tremendous pressure, the industry in South Africa is bucking this trend aggressively, further boosted by increased tourism and high-profile events such as the World Summit and Cricket World Cup. "Delegates and visitors to two recent major international trade shows, the International Trade Show in Berlin and the World Trade Market in London, reconfirmed the huge interest in and popularity of South Africa as a tourist destination."

A survey of 25 of the major operators in the industry in the centres of Cape Town and Johannesburg reflected an average increase in Revpar (revenue per available room) of 25 to 35% for the 12 month period ended December 2002, compared with the previous year. This greatly increased traffic in the main centres is having a positive spillover effect into other areas such as the Cape Winelands, and the eco-tourism or game farming areas of Mpumalanga, as well as the Garden Route .

Demes says while it's still more cost effective for foreign investors to buy an existing operation than to build, it's exciting to see a growing trend towards new buildings being constructed, which include two 5-star country boutique hotels in the Cape Winelands, a 5-star resort hotel soon to commence on the Garden Route, and a boutique niche hotel operation - a new concept popular in the USA and Europe and which is soon to be introduced in Cape Town by a UK investor.

"An added attraction is the government's incentive for the hospitality industry of up to 30% rebate on capital expenditure for the construction of new buildings or the expansion of existing operations. This of course has further advantages in terms of creating employment and boosting the economy." He says due to supply and demand Cape Town is attracting a large share of the greenfields projects, while Gauteng, being more a corporate market is, also enjoying significantly increased investment in the hospitality and leisure industry.

As a result, and identifying a gap in the market, GHIC recently launched an office in Gauteng under Hennie Nasveld, who is also covering the Mpumalanga area. Recent transactions concluded by GHIC include: l A boutique hotel operation in Cape Town CBD sold to an investor from the UK, l A country hotel near the Kruger Park sold to a US investor, l A country hotel on the Garden Route sold to a German investor, l A sale and lease back of a large five star hotel in the Cape to an international listed hotel company, l A new boutique hotel development on the Garden Route being launched by an investor from the United States, l Two new hotel operations to be launched on prestigious wine estates in the Cape Winelands, and l A country hotel near Johannesburg sold to an investor from Cyprus. GHIC is currently negotiating two further transactions regarding greenfields projects in Cape Town.