FIFA World Cup Venue Boosts South African Hotel Revenues

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As the FIFA World Cup kicks off June 11, 2010 in South Africa, new data from STR Global shows that prior to the start of the tournament, the country's revenue per available room (RevPAR) has begun to trend upward during 2010.

Nationwide RevPAR registered a small increase of 1.3 percent between April 2010 and April 2009. Furthermore, whilst the supply of available rooms has been increasing steadily compared with the previous year as hoteliers gear up to host fans from all over the world, the change in demand, measured as occupied rooms, has also begun to trend upwards in 2010 as seen in the graph below. The peaks for RevPAR and demand during June 2009 coincided with the hosting of the Confederation Cup, the prelude to this year's competition.

The additional new supply in host cities has negatively affected year-to-date RevPAR results, as seen in the graph below. All markets reported year-on-year occupancy declines, which drove the RevPAR decreases. Despite falling occupancies Cape Town, Nelspruit and Pretoria have still managed to register modest increases in average daily rate (ADR).

As experienced by other host nations in the past, the long-term influence of the FIFA World Cup on the image and promotion of South Africa to the millions watching on TV should provide a positive boost for future hotel demand.

"The immediate impact of the thousands of visitors on the hospitality industry will be reported by STR Global", said Elizabeth Randall, managing director of STR Global. "With a sample of hotels covering more than 40,000 rooms in South Africa, we are the 'go to' resource when it comes to understanding the performance of the South African hotel market".

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