HPASA: Insight Into The Hospitality Market And Reflections On 2012

Joop Demes, CEO of Pam Golding Hospitality (‘PGH’) which forms part of the Hospitality Partners Association of South Africa, reflects on the 2012 performance and the the state of the South African Hotel Industry.

Cape Town (I-Newswire) March 20, 2013 - Liquidity for medium to large transactions in South Africa remains a challenge but there is, at the same time, a growing appetite, mainly from foreign investors, for South African Hotels that are well priced and are situated in key locations.

An illustrative example of this in 2012 was the successful facilitation of the sale of the well-known Westcliff Hotel in Johannesburg. Selling prices for quite a number of hotels on the Pam Golding books reflect on average a 35% to 45% discount compared to replacement value.

With a South African Hotel market that experienced an overall RevPAR increase of 10,5% during 2012 compared to 2011, Demes expects an increased activity in South Africa regarding a number of well-priced BBEE transactions as well as time share developers who are increasing their search for well-priced existing Hotels.

Pam Golding Tourism & Hospitality Consulting
The Pam Golding consultancy division recorded an increasing number of assignments in neighbouring countries 2012. There remains pockets in Southern Africa with an acute shortage of appropriate, quality accommodation, and the performance of this division augers well for development in the Hotel Industry as most of these appointments are Pam Golding Hospitality integrated assignments that will lead to the search and procurement of a Hotel Operator as well as procurement of investment & finance.

Pam Golding Lodges and Guesthouses
Only two weeks in the new year and Pam Golding Lodges and Guesthouses (”PGLAG”) has announced the facilitation of its first transaction for 2013 with an Anglo-Dutch investment group that has acquired a 14-room guesthouse in Somerset West that was discretely on the market with an asking price of R13.5 million.

PGLAG had a solid 2012 with on-average one successfully-concluded transaction for every month of the year. Pam Golding continue to sell mostly to international clients who remain interested in South Africa due to the superior lifestyle that this country offers together with an exchange rate at a level that offers an increasingly good value for money proposition.

In Conclusion
Pam Golding Hospitality continues to offer a wide variety of lodges, guesthouses and hotels in South Africa and a number of opportunities in neighbouring countries.