Back then, in less than four years, the number of hotel rooms in Johannesburg's northern suburbs more than doubled, placing huge pressure on room occupancies and revenues. However, it seems that hoteliers are ready to start backing Johannesburg again.
Earlier this week the Stockholm-listed Rezidor Hotel Group announced plans to open a Radisson Hotel in the heart of Sandton. The new 283-bedroom hotel will be situated close to the JSE and Sandton Convention Centre.
The group will also open a hotel in Port Elizabeth's beachfront area. Rezidor, which operates 288 hotels in 47 countries across Europe, the Middle East and Russia, already has a presence in Cape Town via the luxury Radisson Hotel on the Atlantic Seaboard and the mid-market Park Inn on Green Market Square.
Industry commentators say that other investors, both local and foreign, are also looking for suitable hotel sites in Johannesburg and surrounds. The surge in interest in hotel developments no doubt comes on the back of SA winning the 2010 Soccer World Cup bid.
The sale of the V&A Waterfront to British developer London & Regional (L&R) and its Dubai partner Nakheel in September last year has also been a key driver of international interest in SA leisure property.
Pace Properties MD David Green, who is currently seeking suitable hotel sites for a number of offshore investors in all SA's major cities, believes the fact that a highly respected but relative conservative player such as L&R is prepared to invest R7 bn in SA has prompted other international players to follow suit.
Moreover, hotel occupancies, room rates and revenue per room (RevPAR), have risen markedly over the past 12 months, making it easier for investors to achieve an acceptable rate of return on new hotel projects.
Latest figures from the HotelBenchmark Survey by Deloitte show that average occupancies for five star hotels across SA jumped nearly 7% to 70% in December 2006, its highest level in many years
Publisher: Property24
Source: Property24