Derek Martin
24 Feb 2025
The report highlights trends at national, regional, and star-rating levels for January 2025 compared to January 2024.
The South African hotel industry showcased a mix of resilience and growth in January 2025, as revealed by the latest STR Report from CoStar Group. This comprehensive analysis, based on data collected from 432 census properties and a sample of 240 properties across the country, provides insights into occupancy rates (Occ %), average daily rates (ADR), revenue per available room (RevPAR), and year-over-year performance shifts. Measured in South African Rands (ZAR), the report highlights trends at national, regional, and star-rating levels for January 2025 compared to January 2024. Below, we explore the key findings and their implications for the hospitality sector.
National Overview: Steady Growth Amidst Modest Gains
South Africa’s hotel market demonstrated positive growth in January 2025. The national occupancy rate edged up to 54.8% from 54.0% in January 2024, a modest increase of 1.6%. More notably, the ADR rose by 10.6% to ZAR 2,262.10 from ZAR 2,045.74, driving a 12.3% increase in RevPAR to ZAR 1,240.13 from ZAR 1,104.13. Room revenue grew by 13.1%, supported by a 2.3% rise in rooms sold and a slight 0.7% increase in available rooms. These figures reflect a robust demand bolstered by higher rates, signalling confidence in the market despite inflationary pressures.
Star-Rating Breakdown: Diverse Performance Across Segments
5-Star Hotels: The luxury segment saw a dip in occupancy from 64.8% to 62.5% (-3.5%), but a significant 12.3% increase in ADR to ZAR 4,558.31 from ZAR 4,057.60 offset this decline. RevPAR rose by 8.4% to ZAR 2,850.70, supported by a 12.5% increase in room revenue. The segment’s ability to command higher rates highlights its appeal to high-end travellers.
4-Star Hotels: Occupancy remained nearly flat at 57.0% (down 0.3% from 57.2%), but ADR climbed 10.1% to ZAR 1,887.13, resulting in a 9.8% RevPAR gain to ZAR 1,075.62. This steady performance suggests reliability in the mid-to-upper-tier market.
3-Star Hotels: The budget segment outperformed its peers with a 7.2% occupancy increase to 51.6% from 48.1%. Coupled with a 7.5% ADR rise to ZAR 1,319.88, RevPAR surged by 15.3% to ZAR 680.83, reflecting strong demand for affordable accommodations.
Regional Highlights: Western Cape Leads, Mpumalanga Struggles
Performance varied significantly across South Africa’s provinces:
Western Cape: The region, home to Cape Town, posted the highest occupancy at 74.2% (up 1.8% from 72.8%) and saw ADR soar by 15.8% to ZAR 3,451.62. RevPAR jumped 18.0% to ZAR 2,560.58, driven by Cape Town’s strong showing at 75.4% occupancy and a 21.0% RevPAR increase to ZAR 3,027.55. The region’s tourism appeal, particularly in summer, fueled these gains.
KwaZulu-Natal: Occupancy rose to 52.6% from 50.5% (+4.2%), though ADR dipped slightly by 1.2% to ZAR 1,400.44. RevPAR increased by 3.0% to ZAR 736.76, with Durban showing a 14.6% RevPAR gain to ZAR 490.14. The region’s mixed results reflect varied demand dynamics.
Gauteng: The economic hub recorded a 6.1% occupancy rise to 44.2%, with ADR up 7.9% to ZAR 1,426.82, yielding a 14.5% RevPAR increase to ZAR 631.17. Sandton (RevPAR: ZAR 640.10, +12.7%) and Pretoria (RevPAR: ZAR 528.17, +19.3%) underscored Gauteng’s business-driven recovery.
Mpumalanga: This region faced challenges, with occupancy plummeting 24.8% to 38.5% from 51.3%. Despite a 6.0% ADR increase to ZAR 1,103.80, RevPAR fell 20.3% to ZAR 425.37, signalling a sharp decline in tourist traffic, possibly due to seasonal or economic factors.
City Spotlight: Cape Town, Durban, and Johannesburg
Cape Town: A standout performer, Cape Town’s RevPAR rose 21.0% to ZAR 3,027.55, with 4-star hotels leading at a 25.4% increase to ZAR 2,091.69. The city’s blend of leisure and business demand solidified its position as a top destination.
Durban: With a 3.9% occupancy gain to 51.6% and a 10.3% ADR increase to ZAR 950.56, Durban’s RevPAR grew 14.6% to ZAR 490.14, reflecting steady coastal appeal.
Johannesburg: Occupancy improved to 30.4% (+7.6%), and ADR rose 7.0% to ZAR 1,502.91, pushing RevPAR up 15.1% to ZAR 456.37. The city’s recovery hints at a rebound in urban travel.
Implications and Outlook
The January 2025 data paints a picture of a South African hotel industry capitalizing on higher rates and selective demand growth. Western Cape’s dominance underscores the importance of tourism hotspots, while Gauteng’s gains signal a strengthening business travel sector. However, Mpumalanga’s decline and uneven regional performance suggest challenges in balancing supply and demand across the country. The 3-star segment’s robust growth indicates a growing market for budget-conscious travellers, a trend worth monitoring.
As South Africa navigates economic and seasonal dynamics, the hotel industry’s ability to sustain ADR growth while addressing occupancy disparities will be key. With data sourced from STR, LLC and STR Global, Ltd., this analysis provides a critical benchmark for stakeholders aiming to optimize performance in 2025.
Note: All currency figures are in ZAR (South African Rands). Data reflects a sample of 31,071 rooms from 240 properties out of a census of 53,190 rooms across 432 properties. For further details, refer to the 2025 STR Report © CoStar Group.