Experience-driven travel fuels revenue growth: South Africa's RevPAR and ADR rise

Source: Steenberg

Cape Town experiences surge in tourism

Cape Town, a key player in South Africa’s tourism sector, has seen impressive growth. The city’s overall occupancy rate increased by 9% in 2023, reaching 68%. RevPAR improved by 22.7% during the same period. International arrivals at Cape Town International Airport skyrocketed by 50%, with over 1.3 million travellers from outside Africa last year.

Cape Town Tourism CEO Enver Duminy says, “The overall occupancy rate in 2023 was 68%—a 9% increase from 2022—with RevPAR improving by 22.7% in the same period.”

Room Raccoon’s report highlights that ancillary revenue from services like airport shuttles, spa treatments, picnic/dining boxes, bottles of MCC/wine, and game drives have significantly contributed to the sector's revenue growth.

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Changing demographics: Younger travellers

The luxury travel market in South Africa is seeing a shift in demographics. Previously dominated by travellers aged 55 and over, the sector is now attracting more individuals in their 30s.

Catherine Schulze, managing director of Cape Town’s five-star Steenberg Hotel & Spa, Bistro 1682, and Tryn restaurants, notes, “It’s more about quality than quantity now. Where previously people might have split their money over different holidays, they now put it all into one trip where they can hire the best cars or stay at the finest hotels.” She adds, “They are also looking to spend more time with loved ones or as friends travelling together. There is more multigenerational travel as well. People are now very conscious of the value of time.”

Steenberg Hotel & Spa adapts to growing demand

Steenberg Hotel & Spa is adapting to the rise in demand for high-end services. Investments in upgrading amenities, including spa services and outdoor areas, reflect a broader trend where travellers seek relaxation and personalised experiences. “That is why Steenberg is investing in creating these spaces, upgrading our restaurants and outdoor areas, and heating our pool,” says Schulze.

The hotel is also seeing growth from new markets, including Scandinavia, Mexico, Italy, and the US. Neilen Tolmay, head of sales, explains, “South Africa is such a multifaceted destination. Both cultural and adventure travel have become important. South Africa lends itself to that.”

Increasing interest from new markets

Steenberg’s expanding visitor base from countries outside traditional markets highlights a growing global interest in South Africa. Tolmay attributes this growth to travellers seeking something different and notes that Steenberg’s focus on personalisation is key to their success: “It’s how a hotel differentiates itself by pre-empting what guests require. It’s why 20% of our guests are repeat customers.”

Travel tips: Navigating booking and planning

For those planning a luxury trip to South Africa, it’s advised to secure services in advance, particularly if combining experiences like safaris with visits to Cape Town. Schulze and Tolmay suggest, “Our best advice is to be clear on what experience you want and provide as much information as possible to the host destination. If you’ve never been to that country, you need an excellent agent who can create that first trip for you.”

In the past three years, Steenberg has seen its shoulder seasons effectively becoming extensions of its peak season. Tolmay notes that fewer tourists during these times offer more opportunities to experience the destination as a local would, adding, “Particularly in the mature segment of the luxury travel market, which is not constrained by school and academic periods, there is greater flexibility.”