A new industry report has found, while demand in South Africa’s hospitality sector has recovered post-COVID, underlying operational pressures continue to intensify – threatening long-term sustainability.
According to the inaugural Hospitality Asset Management Company (HAMAC) South African Hoteliers Report, 77% of hoteliers identify human capital as one of the biggest obstacles to business sustainability while 58% say profitability has stagnated or declined over the past five years.
The report, released on February 2, is based on responses from senior hospitality executives and managers across South Africa.
Recruitment and retention are the sector’s most immediate challenges. Nearly 77% of respondents describe recruitment as “very difficult” and another 21.5% rate it “moderately difficult”. Only a small minority of respondents are satisfied with the competency of newly recruited graduates. The main gaps are leadership (71.4%) and soft skills (59.2%).
Retention is driven mainly by pay (46%), burnout (35%) and lack of growth opportunities (34%).
Operational margins remain under pressure with labour costs cited by 37% of respondents, utilities (particularly electricity) by 34% and food costs by 29%. Almost 30% identified red tape as a material operational constraint.
More than half of respondents (54%) have delayed essential upgrades or improvements due to funding constraints.
Management stress levels are also high: 42% of managers experience stress weekly or daily, which affects decision-making, while almost 96% reported at least moderate stress.
Confidence in sector bodies is low. The majority, 70% of respondents, reported limited confidence in SA Tourism and the Tourism Grading Council of South Africa.
Despite these pressures, 46% of respondents would prioritise investment in people if infrastructure reliability improved. Just over 77% are exploring new technologies to improve efficiency although 76% reported no AI strategy.
“The findings confirm what many hoteliers experience daily: recovery on paper is not the same as recovery in practice,” said Anton Gillis, CEO of HAMAC. “The challenges facing the sector are largely systemic rather than strategic. Without meaningful intervention, these pressures will continue to erode resilience and limit growth.”
HAMAC called for improved service reliability, streamlined regulation and reduced administrative burden to support the sector.
The full HAMAC South African Hoteliers Report can be viewed here.
