The five star Cape Royale Luxury Cape Town Hotel & Residence is within walking distance of the Cape Town Stadium.

The performance and resilience of South Africa’s hotel industry continues to surprise many despite the fact that in 2009 this sector as a whole experienced a decline in SA Rand Revpar (revenue per available room) of 9.8%, says Joop Demes, chief executive of Pam Golding Hospitality. These statistics are according to the STR Global Hotel Review.

“In December, Durban hotels reflected a notable Revpar performance for the month with an increase of 16.8% compared with December 2008. This placed Durban in the number one growth spot in South Africa – ahead of Johannesburg and Cape Town. During 2009 compared to 2008, Durban was also the city which experienced the smallest percentage decline, namely 7.2% in SA Rand Revpar. During this period the annual decline in Revpar for Cape Town was 9.3% and Johannesburg 10.7%,” says Demes.

From a regional perspective the Free State was the best performing province with a marginal decline of 2.9% in SA Rand Revpar in 2009 compared to 2008, followed by the Eastern Cape with a 4.6% decline, Mpumlanga with 8.9%, the Western Cape with 9.5%, KwaZulu-Natal with 10% and Gauteng with 10.8%.

Demes points out, however, that it is important to note that in 2009 the number of rooms increased right across South Africa, which he estimates to be in the region of 5.6%, which includes an increasing number of guesthouses and B&B’s as well as the conversion of residential blocks to apartment hotels. This increase directly dilutes the reported SA Revpar figures.

“It is also very relevant and interesting if Southern Africa as a region is compared to the rest of the world and when comparing global regions the STR Global Hotel Review uses a common currency of US dollars,” he says.

The region referred to as Africa and the Middle East produced the highest global annual US Dollar Revpar during 2009 – a figure which outperformed the Americas with a material margin of 72.1%, Asia Pacific by a considerable 31.2% and Europe by 18.4%.

“Of note is that the percentage decline for Southern Africa in US Dollar Revpar for 2009 compared to 2008 was approximately half that of Asia Pacific and Europe. And if you consider the areas that experienced the least decline in US Dollar Revpar in 2009 compared to 2008, Southern Africa and Northern Africa respectively hold positions one and two out of the 15 key areas in the world.

“These observations are extracted from an analysis of the STR Global Hotel Review for 2009, but if we consider the rand exchange rate to the dollar at December 31 2009 compared to the higher rate at December 31 2008, the result is even more profound as then South Africa as a whole shows no US Dollar Revpar decline in 2009 compared to 2008.”

Demes says against a backdrop of some negative comment recently published about the five star hotel market in Cape Town, it is important to consider the overall 2009 performance of this city.

“Pam Golding Hospitality’s recent survey among the larger, leading and well-branded five star hotels in Cape Town reflects a balanced and fairly stable trading environment, with SA Rand Revpar figures that during 2009 – for some – marginally increased compared to 2008, and for others considered in the survey did not materially decline. At this stage there are definitely no signs of financial distress or cause for alarm for the hotels we interviewed.

“There are of course, a number of five star hotels – often smaller, newer and perhaps not in the best location – which have experienced a tough 2009. According to the STR Global Hotel Review the average SA Rand Revpar decline for grade 5 hotels in Cape Town in 2009 was 12.8% compared to 2008. However, you must take into consideration the substantial increase in the number of five star hotel beds available in Cape Town – up by about 30% at the end of 2009 compared to 2008.”

But how did Cape Town and Johannesburg, for example, fare in 2009 when compared with the major cities in the region the STR refers to as the Middle East and Africa, a region which has been outperforming the Americas and Asia by substantial margins and Europe by a comfortable margin? If you compare the US Dollar Revpar percentage change in 2009 with 2008 within the Middle East and Africa, both these South African cities featured in the top five in the 2009 STR Global Hotel Review, says Demes.

“On a positive note, although we believe there is oversupply of rooms in some categories in certain nodes in South Africa, this is strongly balanced by a definite shortage of beds in certain other categories, nodes and locations. Without doubt more foreigners are interested in guesthouses and boutique hotels and there is increasing demand for our consultancy services, valuations and feasibility studies,” says Demes.