Tourism stakeholders have voiced concerns about flagging five-star hotel occupancies in KwaZulu-Natal and Sandton, which have compounded the issues faced by the same regions in the three- and four- star segments.
BDO’s Tourism Trends Report highlights that average room occupancy (ARO) at five-star hotels in KwaZulu-Natal plummeted to 46% in the first seven months of 2025 – from 61% in 2024 and 67% in pre-COVID 2019. In Sandton, occupancies fell to 57% from 65% in 2024 and 62% in 2019.
In comparison with 2019 data, average room rate (ARR) at Sandton properties was down by 20% in real terms to R1 468 (US$84) and down by 1% in KwaZulu-Natal to R1 930 (US$111).
“The sustained underperformance of KwaZulu-Natal and Sandton is a concern as these regions are central to business and leisure tourism. Their recovery is vital for maintaining employment, attracting investment and supporting the broader hospitality value chain,” FEDHASA National Chairperson Brett Tungay told Tourism Update.
Tungay said prolonged weakness in both regions is indicative of deeper structural issues that require coordinated action from the public and private sectors.
“KwaZulu-Natal, in particular faces a destination perception issue, which the province is working hard to overcome through infrastructure repairs, crime reduction and repositioning as an attractive destination.”
Lee-Anne Bac, BDO Advisory Partner: Tourism, said South Africa desperately needs to heed repeated calls to tackle crime, grime and decay through meaningful collaborations such as city improvement districts.
“Dereliction of our public spaces will continue to drive domestic and international tourists away – we need to recreate spaces that we are all proud of and tourists would love to visit.”
In a Tourism Update poll conducted in October, the largest proportion of respondents (42.9%) chose combatting crime and infrastructure challenges as the most urgent priority to address to enhance the country’s tourism sector.
Tungay said FEDHASA is advocating for a national campaign and public-private sector partnerships to restore South Africa’s image and address safety concerns alongside other initiatives such as focused skills development and leveraging major gatherings such as the G20 in showcasing the country’s events and conferencing capacity.
Cape Town continues to shine
The surging performance of Cape Town’s five-star properties has laid bare the country’s challenges in diversifying the spread of international arrivals.
Five-star hotels in the city recorded an ARO of 67% – level with 2019 but ARR in real terms mushroomed by 41% to R4 393 (US$252), which is triple that of properties in Sandton.
“Cape Town’s strong performance remains encouraging and highlights what is possible when all elements of the tourism ecosystem align,” said Tungay.
“Strong public-private sector collaboration has ensured clean, safe and well-managed tourism precincts, and the city has developed a high-quality, diversified tourism product that offers urban and natural experiences.”
He stressed, however, that the success is primarily reflected in high-performing core areas such as the V&A Waterfront, the City Bowl and the Atlantic Seaboard.
“The broader Cape regions still face seasonal and affordability pressures, underlining the need to spread demand and ensure inclusive growth. Ensuring that development remains sustainable, and that benefits extend to surrounding regions, is essential to preventing over-tourism and preserving the destination’s long-term appeal.”
