South Africa Summer Report 2024

SOUTH AFRICAN SUMMER HOSPITALIT Y REPORT

2024

SA SUMMERTIME BRINGS THE HEAT FOR HOTELS We break down the data between November 2022 -February 2023 & November 2023 - February 2024

Welcome to RoomRaccoon’s Summer Report, coming straight from the beautiful country of South Africa. As the market head of RoomRaccoon for the past 6 and half years, I’ve been fortunate to empower South African hoteliers with the knowledge and tools they need to thrive in a dynamic industry that caters to constantly changing guest preferences.

If you’re lucky enough to live in Cape Town, you’ll know summer is a crowded yet magical experience. Travellers, digital nomads and influencers alike flock to the Mother City to explore the wealth of activities Cape Town has to offer.

With the influx of local and international travellers, South Africa comes alive! And, of course, this means that hoteliers enjoy a bustling festive season – which we’ll be breaking down for you.

Travel in South Africa has shown exciting prospects, with a surge in arrivals of 317,000 visitors recorded in December 2023 and 316,000 visitors in January 2024. The BRICS nations have added to the party, improving air connectivity among their member nations. International tourism to cities such as Johannesburg and Cape Town has exploded. The diversified market share indicates a growing interest among travellers to explore SA. It also highlights that global airlines are instrumental in this significant growth for South African hoteliers.

This Summer report outlines the most important metrics, such as occupancy, direct bookings, RevPAR accumulation and more! With a 12% RevPAR growth from Summer 2023 to Summer 2024, travel continues to boom in the Rainbow Nation.

This report will keep you on the pulse as a South African hotelier and include expert tips on maximising your hotel’s performance.

With RoomRaccoon’s help, you can have an exciting and successful peak season without any of the chaos. So, let’s take a walk on the wild side together and uncover more about SA’s summer season!

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NIELS

Index 1. Foreword 2. RevPAR Growth 3. Beyond Bookings 4. Upselling Evolution 5. Direct vs. Indirect 6. Longer Stays, Stronger Connections 7. Forecast 8. Book a Demo

How to Raise Your RevPAR

RevPAR Growth

Harnessing Revenue Management for Summer Success Our South African hoteliers have been hard at work using modules like revenue management and dynamic pricing tools to optimise their profit. When comparing the data from Summer 2023 to 2024, the average revenue per available room (RevPAR) increased from R1340 to R1493. This figure peaked at R2197 on 31 December 2023. In total, there was an 11% growth in RevPAR year over year!

Is your hotel looking to increase its revenue income?

Assessing your RevPAR is a great place to start. A constructive way to improve your ADR is to offer guests room upgrades throughout their booking journey. With RoomRaccoon’s upselling module, you can offer room upgrades to guests during online check-in. When guests upgrade, your bottom line benefits and your cost-effective room categories free up for more reservations.

REVPAR

2022-23

2023-24

R2500

R2000

R1500

R1000

R500 NOV

DEC

RevPAR | Insights

Summer is always a favourite with travellers, and we can see that RevPAR continues to increase every season. This is due to hoteliers optimising their rates in peak season as demand for accommodation surges. Expecting to manage rates constantly is impossible as hoteliers need their sleep too! We highly recommend investing in a revenue management system to automate dynamic pricing.

The most critical thing South African hoteliers can do is prepare by anticipating the admin of peak season and automating tasks. Hoteliers with an all-in-one PMS can set up automated yield management rules,create enticing seasonal packages and offer add-ons like airport transportation and Winelands tours. These preparations give your property an incredible head start for a splendid summer season.

JAN

FEB

Beyond Bookings

Occupancy & ADR Insights

The summer data suggest that although room bookings are not skyrocketing, the average daily rate of rooms is. A great way to maximise your ADR is by using a dynamic pricing strategy, like yield management.

Optimising Occupancy and ADR Through Dynamic Pricing During the last two summer seasons, the occupancy rate at South African hotels remained consistently high, averaging 62% in 20222023 and 63% in 2023-2024. What’s particularly noteworthy is that despite the steady occupancy levels, hoteliers have significantly increased the Average Daily Rate (ADR) of rooms. In fact, year over year, there was a 10% increase in ADR.

R3000

OCCUPANCY

R2000

2022-23

2023-24

80%

60%

R1000 NOV

DEC

JAN

FEB

40% NOV

AVERAGE DAILY RATE

2022-23

2023-24

DEC

How to Optimise ADR Hoteliers in South Africa can boost their ADR by employing dynamic pricing strategies tailored to local demand patterns.

Dynamic pricing software enables real-time market data analysis, allowing hoteliers to adjust rates accordingly with less effort.

By segmenting the market based on traveller types and preferences, hotels can tailor pricing strategies to maximise revenue. Optimisation of distribution channels, including direct bookings through the hotel’s website, helps minimise distribution costs while maximising hotel revenue.

JAN

FEB

Upselling Evolution

Upselling Strategies to Boost TrevPAR Upselling is a great way to diversify your income and increase Total revenue per available room (TrevPAR). Automated upselling is a simple and effective way to boost revenue and enhance the overall guest experience. If you’re new to upselling, it’s a good idea to begin with some essential add-ons, such as breakfast, shuttle services, a bottle of MC, and late checkout.

Remember to consider your property’s unique selling points and offer add-ons that will genuinely elevate the guest’s stay at your hotel. Here are 6 proven hotel upselling strategies you can implement at your hotel to get started: 1. Include targeted upsells and cross-sells.

2. Partner with local businesses to expand your reach.

3. Optimise the online check-in experience.

4. Include relevant upsell options for specific audiences.

5. Show the unique value of add-ons with aesthetic photos and detailed descriptions.

6. Showcase your add-ons on social media.

Upselling Insights

Following dramatic inflation in 2022 and 2023, the hospitality industry feared a drop-off in travel spending. However, we can see that guests are happier than ever to spend their hard-earned cash on captivating and unique experiences.

Out of the seven best-selling addons in South Africa, five are luxury indulgences. While airport shuttles and breakfast are standard service offerings, most upsell revenue is purely for enjoyment. The spending on spa treatments and picnic boxes is sure to be a sign that travellers in South Africa are willing to splurge on add-ons for a memorable experience.

A practical and effective way for hotels to ensure they maximise upsell revenue is by analysing their performance! Did you know – RoomRaccoon offers a variety of hotel reporting, like revenue from add-ons, which can help inform strategic decisions and service offerings.

Upselling Evolution

Unveiling the Impact on Hotel Revenue Trends Hotels continue to make the most of diversifying their revenue streams with upselling. So, what were guests shelling out for?

Let’s compare!

Bonus Tip

Local is Lekker

Travellers have been spending more on unique experiences, like picnic boxes, memorable dining dates and spa days. We recommend that hoteliers look to diversify their addons. An effective way to create curated experiences is by partnering with local businesses. Your hotel could partner with a fine dining restaurant, day spa or wine farm to include more adventure in your add-ons.

BEST-SELLING ADD-ONS FOR SOUTH AFRICAN HOTELS

2023

2024

1st

Airport shuttles

Airport shuttles

2nd

Spa Treatments

Spa Treatments

3rd

Breakfast

Picnic / Dining Boxes

4th

Bottle of MCC / Wine

Bottle of MCC / Wine

5th

Picnic / Dining Boxes

Game Drives

6th

Charcuterie boards

7th

Game Drives

Breakfast

+2

+2

-3

Charcuterie boards

-1

Direct vs. Indirect

Navigating Booking Channel Dynamics in Summer Seasons The 3 top integrations for our South African users include Booking.com, Google Hotel Ads, and AirBnB. The increased interest in GHA shows that hotels are investing in boosting their direct bookings, seeking independence from traditional OTAs. This shift indicates that hoteliers feel more confident in receiving and attracting direct bookings on their hotel websites. So what OTAs were South African hoteliers connecting with?

The top 10 booking channels indicate that a number of travellers from around the globe are planning international trips to South Africa. An interesting outlier of 2024’s booking channels is the rise of bookings on Ctrip, a predominantly Chinese OTA. This indicates that Chinese travellers are back to visiting South Africa again.

TOTAL BOOKINGS

2023

2024

50000

Summer 2024’s Most Popular Booking Channels

+15%

100000

150000

Staying Competitive in a Globalised Market

We can see that from last Summer to the Summer of 2024, direct bookings decreased slightly. This can be attributed to the global phenomena of direct versus OTA bookings equalising post-covid.

During the pandemic, travellers were booking directly with properties to take advantage of less stringent cancellation policies and practices. Direct bookings surged in Summer 2023 and now in Summer 2024, booking behaviour is returning to its equilibrium.

Always ensure your hotel website’s booking engine houses the most competitive offer to travellers. You can do this by offering better rates on your website to encourage direct bookings over OTA reservations. This boosts your bottom line as it reduces the booking commission paid out to third parties.

It’s essential that South African hoteliers are connected with OTAs popular in the BRICS market for brand visibility. The expansion of SA hotels integrating with BRICS’s popular booking channels maximises hotel brand awareness and funnels online bookers to your website.

Booking Insights

When investigating the booking trends of South African hotels, we’ve seen a move to multi-channel property hosting. The extension across numerous booking channels helps SA hoteliers create brand awareness and demand for their property. This creates an OTA billboard effect, pushing traffic from popular booking channels to your direct booking engine – as guests hunt for the best deal!

Direct

OTA

2023

2024

+10% 20%

50%

75%

100%

Longer Stays, Stronger Connections

Average Length of Stay insights

Attracting Digital Nomads During the summer of 2023, the average length of stay in South Africa was 2 nights, while in Cape Town, it was 2.7 nights. In the following summer of 2024, the average length of stay remained consistent, with South Africa’s ALS being 2 nights and the Cape Town average being 2.7 nights. This uniform data indicates a continued interest among travellers to spend more time in the Western Cape, particularly in Cape Town.

AVERAGE LENGHT OF STAY

South Africa

Cape Town

60%

Cape Town continues to attract an abundance of visitors every summer, with a new record of 317,000 visitors in December 2023. In 2023, Cape Town was voted as the Greatest City on Earth in the Annual Telegraph Travel Awards. With its natural beauty, nightlife and sublime restaurants, Cape Town is a popular tourist destination. Moreover, it is home to a large population of digital nomads, mainly German and Dutch visitors. So how can hotels in South Africa maximise their guests’ stay?

Let’s discuss.

40%

20%

1 night

2 nights

3 nights

4 nights

+5 nights

Create a Community to Attract Longer Stays Digital nomads travel to foreign countries to delight in new experiences, explore different cultures, and connect with a global community. The best part about offering accommodation to digital nomads is that stays are significantly longer than holiday visits, and their booking is relatively low-risk.

The best way to attract digital nomads is with communal spaces and personalised packages. To attract longer stays, ensure that your hotel has fast wi-fi, a cosy cafe or restaurant for guests, co-working spaces, and meeting rooms. These additional amenities and options will afford your property a competitive edge when digital nomads pick their temporary homes.

Personalised packages for digital nomads could include highspeed wi-fi, priority access to meeting rooms and social events to foster new connections.

Forecast Looking ahead, the South African hospitality industry is poised for continued growth and must adapt to evolving consumer preferences. To stay competitive, hoteliers should embrace technology-driven solutions for revenue management, upselling, and guest engagement.

Hotels must also diversify their distribution channels and form strategic partnerships to expand their market reach and drive direct bookings while minimising reliance on third-party platforms.

By capitalising on the allure of destinations such as Cape Town and tapping into emerging trends such as longer stays for digital nomads, hotels can differentiate themselves and attract discerning travellers seeking immersive, authentic experiences. These trends present lucrative opportunities for the industry to thrive.

With its breathtaking landscapes, rich cultural heritage, and warm hospitality, South Africa is poised to emerge

as a beacon of tourism excellence on the global stage.

By leveraging its diverse attractions, fostering strategic partnerships, and embracing a forward-thinking approach, the country’s hospitality sector is primed for a future of prosperity and success.

I am confident that South African hotels can achieve sustained success and growth by leveraging datadriven insights and embracing innovation across all their operations in the ever-evolving hospitality landscape. I’m thrilled to be a part of the rapidly expanding hospitality industry in South Africa, and I firmly believe that RoomRaccoon will make a significant and positive impact on it.

NIELS

Join The Hoteliers Leading The African Hospitality Industry RoomRaccoon empowers hoteliers with an integrated platform to streamline daily tasks, unlock new revenue, and delight guests through process automation. Our fully integrated platform has all the necessary core tools: a powerful property management system, a built-in booking engine, and one of the world’s fastest channel managers.

RoomRaccoon was a finalist for the Hotel Tech Report 2023 Best HMS and has recently been named the Best Ease of Use HMS 2023

by Capterra.

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