Hotel Development in the Major Nodes of South Africa

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Hotel Development in the Major Nodes of South Africa

Although it is considered a mature and established hotel market, hotel development in South Africa is ongoing with numerous future hotel development projects planned and/or under construction in major nodes throughout the country.

HTI Consulting, our specialised hospitality consulting firm based in Cape Town, has strong relationships with all the major hotel operators and management companies active throughout the continent. As one of the leading hospitality consulting firms in Africa, We stay abreast of all hotel development projects taking place within various African territories. The major nodes in South Africa for hotel development remain Cape Town, Johannesburg (more specifically, Sandton), and Umhlanga, which has taken over as the economic and commercial hub in KwaZulu-Natal.

Of the major regional and international hotel operations active on the African continent, Radisson Hotel Group, Marriott International, Hilton Worldwide Holdings, Premier Hotels & Resorts, and ONOMO Hotels, to name a few, are currently undertaking the hotel development projects in these nodes within South Africa. In recent years,

Cape Town has seen a large number of hotel development projects entering the market with more than 1 000 rooms entering since 2017. The recent hotel development projects in the node include, but are not limited to:

• The Silo Hotel (28 rooms)
• SunSquare (202 rooms)
• StayEasy (302 rooms)
• Radisson Red Waterfront (252 rooms)
• Signature Lux Hotel by ONOMO (165 rooms)
• AC Hotel by Marriott Cape Town (188 rooms)
• Newmark Onyx Hotel (102 rooms)

The hotel development in Sandton has not been as aggressive as in the other nodes due to its hotel market already being mature. The most recent hotel development projects to enter the Sandton market include The Signature Lux Hotel by ONOMO (218 rooms) and The Capital On The Park (305 rooms). These two hotels are unique and have added diversity to the Sandton hotel market, which has historically included more traditional hotel development projects.

Although not as aggressive as Cape Town, the hotel development in Umhlanga has been on a positive trajectory with numerous hotel development projects confirmed. A Radisson Blu (270 rooms) that will form part of the Oceans Umhlanga development, a large mixed-use development near Umhlanga beach, is under construction and scheduled to open in 2020. A Hilton Garden Inn (207 rooms) has been signed and will form part of the Umhlanga Arch development located on the slopes of Umhlanga’s Ridgeside, whilst Marriott International has announced that their latest project in the node will be an AC Hotel by Marriott which will be located in Umhlanga Ridge.

In addition to the aforementioned internationally branded hotel development projects scheduled for the Umhlanga node, Premier Hotels & Resorts (a regional hotel owner and operator) has announced that two Premier Hotels are under construction in Umhlanga. These hotel development projects will consist of a 4-star and 3-star offering, enabling the group to capture a greater portion of the market. The completion of these hotels is scheduled for the end of 2019.

Although the South African hotel market is considered mature and established, hotel development projects are ongoing in the major nodes of the country. The continued hotel development highlights investor confidence in the aforementioned nodes, and the strength of the hotel and tourism industry in each.

HTI Consulting undertakes various hotel development projects in these regions.