Independent hotels in South Africa have achieved a new precedent in revenue per available room (RevPAR) performance over the festive season, measuring R2 197 (€107) on December 31 – the highest volume recorded by hotel management software company, RoomRaccoon, since it launched its South African division in November 2017.
The data analysed the booking data from over 4 500 rooms in boutique hotels, B&Bs and guesthouses using RoomRaccoon’s leading hotel management software across the country.
According to RoomRaccoon, independent hotels in South Africa reported a 9% increase in RevPAR, the standard metric for measuring top-line performance, on New Year’s Eve compared with 2022.
This increase can be attributed to consistently strong occupancy rates, which measured 76% in 2023, as well as a notable increase in Average Daily Rate (ADR), climbing from R2 560 (€125) in 2022 to R2 890 (€141) in 2023.
Niels Verspui, Market Head of RoomRaccoon South Africa, said: “The increase in RevPAR indicates the South African hotel industry’s success in optimising revenue by capitalising on sustained high occupancy in 2023 over the festive season.”
While the RoomRaccoon study focused on independent hotel sector, larger chains also seem to have seen a significant RevPAR growth.
Lindi Mthethwa, Director of Sales and Marketing for Minor Hotels, told Tourism Update that, over the festive season, Minor achieved a 22% ADR growth across the region compared with the 2022 festive season.
“The growth in ADR is attributed to retail bookings made directly on the hotels’ websites as well as group leisure and incentive bookings. The opportunities we have to increase ADR is through bookings that are made directly on the hotels’ websites as well as on the Anantara App and the Avani Hotels App,” Mthethwa said.
Looking ahead in 2024
Verspui recommends that hotels leverage dynamic pricing technology to maximise RevPAR in 2024. “By implementing smart technology, hoteliers can leverage sophisticated algorithms that understand supply and demand dynamics in real-time. This ensures that room rates are adjusted dynamically, maximising revenue during peak periods and maintaining competitiveness during slower times.”
Garth Musikanth, Global Chief Financial Officer for Newmark Hotels & Reserves, said Newmark had a positive outlook regarding RevPAR and ADR growth for 2024.
“The challenge is always to fight against complacency and continually strive to improve product offerings. The creation of unique and memorable guest experiences, whether in the city, bush, or winelands, organically creates scope for revenue growth,” said Musikanth.
He added that, in 2024 Newmark aims to further grow its portfolio of hotels and reserves.
“This will provide us with more cross-selling opportunities which in turn will drive RevPAR and ADR. Our customers are particularly enjoying the Newmark circuits that we have created combining Cape Town city stays with Winelands escapes and bush experiences.”
Musikanth concluded that Newmark would strive to introduce new value-added offerings which also drove RevPAR and ADR.
“Under the guidance of Group Head Chef Chris Erasmus and Group Sommelier Marlvin Gwese, we’ve spent a lot of time improving and differentiating our food and wine offerings and one of our key focuses in 2024 will be the introduction of more wellness experiences at touchpoints throughout the Newmark customer journey.”
