Tourism sector is evolving upwards

After Covid, the South African tourism industry was bruised, cautious and uncertain about when international travellers would return in meaningful numbers. Now, across the country, construction sites and billion-rand refurbishments tell a different story. Hotels are expanding, international brands are entering the market and developers are repositioning older buildings as boutique hotels and aparthotels.

Luxury retail is expanding in key tourist precincts and a clear premiumisation trend is emerging. South Africa’s tourism industry is evolving into something more sophisticated, more premium and more commercially sustainable. Last year, the country welcomed about 10.5 million tourists, the highest level in a decade.

Most visitors were from African countries. Travellers from the UK, Germany, the US and the Netherlands are again booking trips in significant numbers. Hotel performance data shows guests are booking further in advance, staying longer and spending more on in-hotel experiences.

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Add-on spending (on extras like food, beverage, room upgrades, transport and so on) rose sharply last year, increasing by more than a quarter. In other words, travel is becoming intentional again. It’s planned, curated and experience-led.

The development pipeline reflects that confidence. Across Africa, there are hundreds of hotel projects under way but South Africa’s growth is steadier. Instead of rapid expansion, the pattern is disciplined and brand-led.

International operators are focusing on locations where long-term demand appears resilient. The Western Cape remains the engine room of the hospitality story. Cape Town ranks among the world’s most desirable cities for travellers.

More than 40 hotel projects and refurbishments are under way in the province. The InterContinental Table Bay at the V&A Waterfront has undergone a refurbishment worth about R1 billion. The V&A Waterfront precinct itself is also entering its next phase.

The area attracts about 24 million visitors a year. A major expansion around Granger Bay is being planned,with development rights for about 440 000m2of new space and land to be reclaimed from the sea. The expansion could include hotels, residential buildings and commercial developments. In investment terms, it is a signal of long-term conviction.

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