South Africa Hotel Performance: A Robust Recovery in May 2025

Nationally, South Africa’s hotel sector reported a 6.9% increase in occupancy, climbing from 55.7% in May 2024 to 59.5% in May 2025. The ADR rose by 8.5%, from ZAR 1,610.11 to ZAR 1,747.04, driving a robust 16.0% surge in RevPAR, from ZAR 896.67 to ZAR 1,039.81. These gains reflect a healthy balance of increased demand and pricing power, with room revenue also up by 16.0%. Year-to-date (YTD) figures further underscore this positive trend, with occupancy slightly up by 1.7%, ADR increasing by 9.8%, and RevPAR growing by 11.7%.

The data, drawn from a sample of 230 properties (representing 29,285 rooms) out of a census of 431 properties (52,742 rooms), highlights broad participation and reliable insights. The 0.1% increase in room availability and 7.0% rise in rooms sold indicate that the industry is effectively capitalizing on growing traveller interest.

Star Ratings: Diverse Performance Across Segments

5-Star Hotels: Premium Pricing Drives Gains

The 5-star segment showed modest occupancy growth of 0.1%, from 60.9% to 61.0%, but excelled in pricing, with ADR increasing by 8.1% to ZAR 3,212.17. This led to an 8.2% RevPAR increase, reaching ZAR 1,958.47. However, YTD figures reveal challenges, with occupancy down by 3.5% and RevPAR growth of 9.1% driven primarily by a 13.1% ADR hike. The segment’s performance suggests that while luxury travellers are willing to pay a premium, occupancy remains sensitive to economic factors.

4-Star Hotels: Strong Occupancy and Revenue Growth

The 4-star category was a standout, with a 7.1% occupancy increase to 61.3% and a 14.1% ADR rise to ZAR 1,617.17. This translated to a remarkable 22.2% RevPAR growth, reaching ZAR 991.61. YTD data mirrors this strength, with a 1.6% occupancy gain, 12.3% ADR increase, and 14.0% RevPAR growth. The segment’s ability to attract both leisure and business travellers, combined with competitive pricing, positions it as a key driver of the industry’s recovery.

3-Star Hotels: Value-Driven Demand

The 3-star segment recorded the highest occupancy growth at 11.0%, reaching 58.0%, with a modest 4.2% ADR increase to ZAR 1,202.09. This resulted in a 15.7% RevPAR jump to ZAR 696.73. YTD trends show consistent gains, with 4.3% occupancy growth, 6.5% ADR increase, and 11.1% RevPAR growth. The value-driven appeal of 3-star properties continues to resonate with budget-conscious travellers, particularly domestic tourists.

Regional Highlights: A Mixed but Promising Picture

Western Cape and Cape Town: Tourism Powerhouses

The Western Cape, led by Cape Town, remains a cornerstone of South Africa’s tourism industry. The region saw a 1.6% occupancy increase to 59.5%, with a 10.8% ADR rise to ZAR 2,441.26, resulting in a 12.5% RevPAR gain to ZAR 1,452.10. Cape Town itself reported a 1.5% occupancy uptick to 60.3% and a 13.9% ADR increase to ZAR 2,898.59, driving a 15.6% RevPAR surge to ZAR 1,747.38. YTD figures are even more impressive, with Cape Town’s RevPAR up by 21.6%, fuelled by an 18.1% ADR increase.

Notably, Cape Town’s 4-star segment excelled, with a 2.9% occupancy increase and a 22.8% ADR jump, leading to a 26.4% RevPAR gain. The 5-star segment also performed strongly, with a 2.6% occupancy rise and 14.0% ADR growth. The region’s appeal as a global tourism destination, bolstered by its cultural attractions and natural beauty, continues to drive demand.

Gauteng: Business Travel Fuels Growth

Gauteng, South Africa’s economic hub, reported a 10.8% occupancy increase to 59.8%, with a 4.6% ADR rise to ZAR 1,435.17, resulting in a 16.0% RevPAR gain to ZAR 857.97. Pretoria & Surroundings was a standout, with a remarkable 31.3% occupancy surge to 62.7% and a 43.2% RevPAR increase to ZAR 830.67. Sandton and Johannesburg also performed well, with RevPAR gains of 9.3% and 18.5%, respectively.

The 4-star segment in Gauteng led with a 17.5% occupancy increase and 27.0% RevPAR growth, reflecting strong business and conference-related demand. The region’s recovery highlights its role as a commercial centre, with hotels benefiting from both domestic and international travellers.

KwaZulu-Natal: Mixed Results with Bright Spots

KwaZulu-Natal saw a 5.3% occupancy increase to 57.6%, with an 8.2% ADR rise to ZAR 1,345.30, yielding a 13.9% RevPAR gain to ZAR 775.14. Umhlanga was a highlight, with a 13.5% occupancy increase to 66.2% and a 14.2% RevPAR rise. The 3-star segment also performed strongly, with a 12.1% occupancy gain and 26.7% RevPAR growth.

However, the 5-star segment struggled, with an 18.5% occupancy decline and a 24.5% RevPAR drop, suggesting challenges in attracting high-end travellers. Durban’s mixed performance, with a 3.6% occupancy decline but a 26.3% RevPAR increase driven by a 31.0% ADR hike, indicates pricing strategies are compensating for lower occupancy.

Emerging Regions: Free State and Limpopo Shine

The Free State reported a 22.7% occupancy increase to 66.0% and a 37.0% RevPAR surge to ZAR 750.55, driven by both leisure and business travel. Limpopo also performed well, with an 11.3% occupancy gain to 68.3% and a 23.6% RevPAR increase to ZAR 842.54. These regions, often overshadowed by major hubs, are emerging as attractive destinations for travellers seeking unique experiences.

Interesting Insights and Trends

An intriguing trend is the significant RevPAR growth in smaller markets like Pretoria & Surroundings (43.2%) and Free State (37.0%), which outpaced major tourism hubs. This suggests that secondary destinations are gaining traction, possibly due to lower costs, unique offerings, or increased domestic tourism. Additionally, the 4-star segment’s consistent outperformance across regions highlights its versatility in catering to diverse traveller needs, from business guests to families.

Another notable observation is the resilience of ADR growth despite economic uncertainties. Hotels are successfully implementing dynamic pricing strategies, particularly in high-demand areas like Cape Town and Gauteng, to maximize revenue. However, the 5-star segment’s YTD occupancy declines in some regions, such as KwaZulu-Natal (-23.4%), warrant attention, as they may reflect shifts in luxury travel preferences or competitive pressures.

The South African hotel industry’s performance in May 2025 signals a robust recovery, driven by strong occupancy gains, strategic pricing, and growing demand across diverse regions. While major hubs like Cape Town and Gauteng continue to lead, emerging destinations like Free State and Limpopo are carving out their niches. The 4-star and 3-star segments are proving particularly resilient, balancing affordability and quality to attract a broad traveller base.

As the industry looks ahead, maintaining this momentum will require continued investment in marketing, infrastructure, and guest experiences. With South Africa’s rich cultural heritage, stunning landscapes, and vibrant cities, the hotel sector is well-positioned to capitalize on both domestic and international tourism growth, setting the stage for a promising future.

Source: 2025 STR, LLC / STR Global, Ltd. trading as "STR".