The V&A Waterfront has confirmed its intention to develop a mid-market, internationally-branded hotel in the forthcoming year.
David Green, CEO of the V&A Waterfront said, ''Given the growth in domestic, business and leisure tourism, coupled with consistent growth in the occupancy at our current hotels over the past 18 months, we believe the opportunity exists for a mid-market hotel development.''
According to Cape Town Tourism, the expected tourism growth in the City for 2014 will be between 4 and 5%, while the United Nations World Travel Organisation (UNWTO) estimated a global year-on year increase of 3.3% per annum until 2030. For Cape Town, the majority of source markets are European, while the biggest growth market is set to come from Latin America.
With more than 24 million visitors per annum, and recognised as an economic powerhouse that has contributed almost R200 billion to South Africa's gross domestic product (GDP) in the last 10 years, the Waterfront is an attractive prospect for international hotel operators.
With the announcement of this development, an opportunity for a new operator is presented for the first time since the new build for the One & Only in 2009. The newest of the Waterfront hotels is the Queen Victoria, the result of the refurbishment of an existing building in 2011.
The V&A is currently home to 6 five star hotels, 2 four star hotels and 2 three star hotels. Within Cape Town, there are 24 five star, 54 four star and 20 three star hotels.
In all three classes compared in an independent report commissioned by the V&A Waterfront, the RevPAR figures for hotels at the Waterfront are much higher than those of surrounding areas, by premiums ranging from 52% for five star, 71% for four star and 95% for three star.
According to a report by Price Waterhouse Coopers LLP, Wilkofsky Gruen Associates, a snapshot of the South African hotel sector's performance over the period January to June 2013 reflects sustained growth with RevPAR (revenue per available room) increasing by 13.1% on a national aggregated basis. Healthy growth of 12.4% was experienced at three and four star levels, while the five star levels reflected impressive 15.6% growth. It also indicated Cape Town's growth in this sector at 16.2%.
Kamil Abdul-Karrim, Managing Director of Pam Golding Tourism & Hospitality Consulting commented that the South African Hotel Industry had come through its worst trading cycle in recent times from the last quarter of 2008 to the third quarter of 2011, and is now beginning to reflect sustainable signs of recovery with the last three quarters reflecting year-on-year growth.
David Green concluded, ''The V&A Waterfront continues to attract a premium in rates and higher- than- average occupancies, and we believe an internationally-branded and marketed hotel will add to the portfolio and meet the increasing demand for such accommodation.''