International and local investors are “extremely interested” in investing in tourism and hospitality products in South Africa – a sure sign that they are confident in a growing domestic and global tourism demand in the country.
This was one of the key takeaways from a panel discussion – led by Deputy Minister of Tourism, Amos ‘Fish’ Mahlalela – at ITB Berlin last week, said South African Tourism’s Chief Quality Assurance Officer heading up the Tourism Grading Council South Africa, Bronwen Auret.
Speaking to Tourism Update this morning (Monday, March 13), after returning from Berlin, Auret said investors were looking at opportunities within the sector to leverage trends that have emerged post-COVID – including short- and long-term stays for bleisure travellers and digital nomads and sustainable offerings.
“It was interesting to hear that both local and international investors see the potential of investing in South Africa,” she said, noting that the proudly South African group, Motsamayi Tourism – COO Brett Hendricks was also on the panel – was still focused on developing new products in the country.
Auret pointed out that the South African development finance institutions (DFIs) offered investment incentives that took a long-term view of the economy.
“It is our responsibility as government to listen to the private sector and then do our best to resolve any challenges they may encounter. Regulations such as environmental impact assessments and zoning assist the private sector and communities by creating certainty, which private-sector firms valued sometimes, she said.
“Tourism in South Africa is open for investment, particularly in underdeveloped areas where demand already exceeds supply, ensuring a good return on investment,” highlighted Auret.
Infrastructure upgrades
Mahlalela affirmed this, commenting that South Africa had a number of incentives aimed at encouraging investment, supported by the DFIs.
He highlighted that government had also put measures in place to protect and rejuvenate the supply base of the tourism economy – such as airports, roads and amenities such as Internet and broadband supply – to ensure they kept up with the anticipated high demand.
Mahlalela added: “Some of our private-sector stakeholders have informed us that they would invest more resources if some of the regulatory, financial and infrastructure barriers were addressed.”
Another hotel in the pipeline
And other hoteliers are also pushing investments in SA.
Hamza Farooqui, CEO and Founder of Millat Investments – which has special interests in fuelling and convenience stations as well as four Hyatt properties in Cape Town and Johannesburg respectively – told Tourism Update that the group had a further “significant” hospitality project in the pipeline, which would be announced soon.
In response to a question about South Africa’s attractiveness as a destination – and the current challenges – Farooqui said every country’s investment environment posed risks.
“It is an entrepreneur’s job to find solutions to the challenges. South Africa is a beautiful country and there are loads of opportunities,” he said, noting that the country was particularly popular for its warmth and authenticity.
“But we cannot properly package and sell our products in a competitive international tourism stage if we don’t have the political will to address the barriers to growth and noted that it was time for government to address these.
“Talk is cheap. We now need action to address, amongst others, safety and security, visas and airlift,” he said.
“If South Africa cannot get these fundamentals right, we do risk losing market share to other countries.”
Farooqui further noted that, while domestic travellers had helped add cash flow to the hospitality industry, particularly as the inbound market still has a way to go towards full recovery, it was important for South Africa to have a strong international strategy.
