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Hotels Drive Growth in South Africa’s Hospitality Sector

The hospitality sector has continued to grow in the first quarter of 2023 with hotels the driving force behind growth in the accommodation sector when compared to the prior year and month. This is according to the latest data released by Statistics South Africa

The increase on total income for the prior year was 38,9% for January and 34,3% for February. The increase in income from accommodation was at 59,4% in February, which is an increase of 3,6% on January. Income from hotels showed positive growth at 69,1%, an increase of 6,2% on January 2023. 

The increase in the three months ended in January 2023/February 2023, compared to last year was at 46,7% in January and 51,5% in February, with hotels contributing 60,3% and 65,1% respectively. 

The food and beverage segment remains under pressure, although showing signs of growth in some areas. The total income generated on the prior year was 15,5% for January and 14,9% for February. 

Bar sales have shown the most significant growth, at 35,5% compared to 2022. Food sales decreased in February by 1% compared to January, but at 13,8%, they are up on December’s 13,6%.  The total increase in the three months ended in January 2023/February 2023 was at 15,5% for January and 15,8% for February. Restaurants and coffee shops have been leading the way with a 15,7% increase in January and a 16,4% increase in February. 

 Anderson, FEDHASA National Chairperson, says: “We are delighted to see the strong growth in the hospitality sector as evidenced by the latest Statistics South Africa report, particularly the 35,5% increase in bar sales. This is a testament to the resilience of our industry and its ability to recover from the challenges of the pandemic.” 

“It is important that the data is viewed within context, especially in terms of the positive growth in the food and beverage data. Despite this growth, profit margins are being squeezed, due to rising food costs, electricity challenges and the cost of additional overheads, such as diesel for generators. Businesses also have to contend with water shortages or an erratic water supply. The south coast of KwaZulu-Natal is particularly struggling with this. As a result, businesses must invest significantly in alternative energy and water sources to keep the lights on and ensure a constant and stable water supply,” says Anderson.

“Basic infrastructural challenges are putting additional pressure on an industry which has had a steep hill to climb in terms of recovery,” Anderson says. “We still have to deliver ‘business as usual’ for our guests, but these challenges are impacting our ability to grow, as well as to contribute to the economy and create jobs.  “It is therefore critical for local municipalities and the government to improve basic infrastructure, such as electricity and water supply, to ensure a positive guest experience and position South Africa as a favourable destination for both local and international visitors,” she concludes.

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