Accommodation – a pillar of the tourism industry

The accommodation industry in South Africa is characterised by its diversity, catering to different budgets, preferences and types of travellers. It includes a mix of international hotel chains, locally-owned establishments, guest house lodges and holiday rentals, all very essential to the tourism industry of a country that is one of the most beautiful and diverse tourism destinations in the world.

Tourism’s contribution to the economy

The WOW report on the accommodation industry refers to the World Travel and Tourism Council (WTTC) Economic Impact Report, which states that the sector is expected to grow at 7.6% annually over the next decade, far outpacing economic growth of 1.8%. By 2032, the sector’s contribution to GDP could reach more than R554.6bn (7.4% of the total economy), injecting nearly R287bn into the economy.

The leader of the pack in the accommodation industry

There has been significant growth Airbnbs, contributing to the economy and supporting jobs and smaller operators. However, local communities and the hospitality industry have expressed concern about their impact on traditional hotels and their contribution to the housing shortage, particularly in areas like Cape Town that attracts many tourists.

The Department of Tourism also revealed its intention to regulate Airbnb and other home-sharing apps in April 2019 through the still awaited Tourism Amendment Bill. While regulation maybe required, one cannot help but wonder if this is the best approach given that Airbnbs mostly benefit smaller operators and owners.

Which accommodation options have been driving tourism

From luxury lodges to safari camps, boutique hotels, guest houses, self-catering accommodations, game reserves, bed and breakfast to Airbnbs, South Africa offers travellers a host of options. These range from very luxurious stays at places like the Kruger National Park, Sabi Sands, and Madikwe with world-class wildlife experiences, lavish amenities, gourmet dining and game drives, to low-cost backpacker accommodation in more modest tourism attraction destinations.

The country’s accommodation industry caters to different travellers and budgets for people seeking adventure or looking for beautiful weather where they can relax in plunge pools or on beaches. The country has a well-established accommodation industry in different settings, from the very heart of nature to the most cosmopolitan urban centres.

The industry combines diversity, quality, affordability, and an authentic connection to the country’s natural and cultural heritage. It offers not just a place to stay, but a gateway to memorable experiences, making it a compelling value proposition and a cornerstone of the country’s thriving tourism sector.

Leveraging technology

Technology has contributed to the shift in the accommodation industry with digital marketing, including social media marketing, and booking platforms, enabling the streamlining of operations and improving guest experiences.

Virtual reality tours and augmented reality experiences have made it possible for travellers to view the accommodation they are booking before confirming their booking, and for establishments to set themselves apart in a competitive market.

Challenges to be overcome

While the Airbnb subsector has made it possible for smaller operators to enter the market, it has created some tensions with traditional operators asking for stricter regulation and other critics slating Airbnbs for reducing housing availability for locals, particularly in tourist areas.

Smaller operators also lament the revenue-sharing model by online booking platforms. This was reported to the Competition Commission resulting in the Commission and Booking.com agreeing on steps to be taken by the online accommodation booking platform to fulfil remedial actions, including removing clauses that prevent suppliers from offering better terms on other sales channels, and from any criterion for participation in Booking.com’s incentive programmes or any other membership programmes.

Opportunities in South Africa’s accommodation sector

Despite the challenges, the diverse accommodation landscape illustrates the attractiveness of South Africa as a destination.

Small-scale operators and entrepreneurs can enter the market, particularly those operating in eco-friendly lodges that leverage the country’s natural resources such as luxury farms, game lodges, and adventure hostels. The positive side of online booking platforms is that they have made it possible for operators to connect with travellers.