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Hotel Room Oversupply and Average Room Rates in South Africa

Room Rates The touristry industry brings in valuable strange currency for every inward tourist who comes here from our source markets. The hospitality industry creates much-needed direct employment chances for every tourist who calls in our shorings. Unemployment is generally regarded as a major contributor to the poverty position and a direct cause of the crime problem in South Africa. For these reasons, it is easy to consider how essential and important the touristry and the hospitality industries are south African economy. South African tourers, who hap to be the largest consumers of touristry product, have to brook the brunt of the high hotel room rates. In its key findings, P0351 — Touristry and Migration, July 2010, Statistics South Africa reported as follows : “In June 2010, there were 997 960 strange comers to South Africa. The comers were made up of 16 368 non-visitors and 981 592 visitants. The visitants comprise of 260 281 same-day visitants and 721 311 overnight visitants (tourers). The equipment failure of the tourers by region is as follows : 277 345 from oversea ; 398 085 from SADC areas ; 22 989 from ‘other’ African countries and 22 892 unspecified”.

International tourers likewise ascertain it difficult to give the high room rates when these are compared with our globose rivals. Brazil, e.g., which is similar to South Africa in some respectfulnesses, is geographically closer to most of the same reference markets that we rely on for inward visitants. “The upscale hotels in the major urban centers of Rio de Janeiro and Sao Paulo reported median room rates of between $300 and $400. Although the South African equivalent is around $190 at current exchange rates, the difference can arguably be absorbed by the cost of locomoting here, a destination which is generally regarded as a long-haul destination.

High room rates make conditions of an oversupplied marketplace. Under normal circumstances, such a precondition should bring about a step down in average casual room rates as a solvent of market forces of demand and supply. Or else, what we have seen is a diminution in occupancy rates, despite the World Cup having been successfully hosted in South Africa lately.

Some areas have phrased diverse solutions to manage with the hotel glut problem. Others have not dealt with the problem and left it to market forces. As with any solution to this type of miscellaneous problem, the good must be smitten the bad. Some solutions merely look good in writing but, while others that are implementable may not produce the expected issues. It is essential though in the first place to name where this glut exists and to quantify its extent.

Hotel operators can set about by discounting room rates. “The twin problem of trimming median casual room rates is that clients tend to cerebrate that the quality of the property has spent, too as that it is often hard to get up them at one time stipulations better once again”. “Instead of spending rates, hotels are adding value, proffering two-for-one hatfuls where visitants get one dark ‘free’ on top of the original booking, extras such as free bottles of vino with a dinner in the hotel eatery or vouchers for various amusement in the city. For the Xmas season, many held expensive buffet dinner celebrations, with entry included in the room rate”. more info : Journal of Real Estate, Discount Room Rates, Room Rates

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