Cape Town - South Africa's hospitality sector, especially in Cape Town, will see a massive expansion over the next 4 years, as plenty of foreign investors have made a collective investment of over R3.5 billion directly to the hotel industry in SA.
11 new hotels are planned to be built leading up to 2018.
The Western Cape has had a revenue growth of 19.2% over the past year, which highlighted the current under supply of especially mid-market, or average 3-star hotels in Cape Town. Hence, 7 of the 11 planned hotels are scheduled to be built in a 10km radius of the Cape Town International Convention Center (CTICC), in the heart of the Mother City, says Joop Demes, CEO of Pam Golding Hospitality.
Demes says 8 of the 11 hotel projects in South Africa are well advanced, and 3 of the projects are currently at a "feasibility stage". He says most of the planned hotels are scheduled to open within the next 4 years.
The hotels will make way for more than 2000 new rooms of various markets. According to Times Live, 1312 of the new rooms are expected to be 3-star or mid-market, 340 rooms are planned to be 4-star or upscale, and 450 of the rooms will be luxury or 5-star.
Times Live and the Business Times reported that the foreign investors have invested directly in hotels within the Western Cape and in Johannesburg. Investors from the US, China and the Middle East are most prominent and have a big interest for investing in existing under-performing hotels.
Demes also said the investment surge can be partially accredited to the favourable exchange rate in South Africa.
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