The SA hospitality industry is under enormous pressure as the expected wave of accommodation bookings for the Soccer World Cup hasn’t realised yet.
This state of affairs has led to a sharp rise in the amount of game reserves and hotel properties being sold on auction.
Rael Levitt, CE of Auction Alliance, says five hotels will go under the gavel during the next few months. “Several role players in the hospitality sector thought they’re going to be inundated with bookings, but not much has happened,” he says.
Mac van der Merwe, CE of the Zorgvliet group that owns a portfolio of luxury hospitality properties, says those role players who say they are not taking strain in the current conditions, are naïve.
The group is busy shrinking its portfolio and shifting its focus to the SA tourism market, mainly due to a lack of interest from foreign visitors. “The Big Five are a very competitive market and international interest has dwindled over the last couple of years.”
The group’s luxury Ka’Ingo game reserve in the Waterberg, 47km from Vaalwater, will be auctioned on 17 March. The reserve covers 6,453 ha and is aimed mainly at visitors wanting to see the Big Five. Van der Merwe says the reserve price is R85m and there is interest from a local consortium, as well as prospective buyers from Abu Dhabi, Dubai and Europe.
The group’s future focus will be on making its hospitality properties more accessible to South Africans, more specifically the Dinkweng Safari Camp, which is also in the Waterberg. He says an additional R30m will be spent to build another nine family lodges in the safari camp.
Another leisure property being auctioned by Auction Alliance on 11 February is the Keurbooms Hotel & Chalets in Plettenberg Bay. This 10,4 ha property was supposed to house a new five-star hotel development, but the developers, MDC Porjects, was liquidated in September 2009.
The premises include an existing hotel, separate chalets and outside buildings.
The pressure on the hospitality sector is also reflected in the Hospitality property fund’s B-units delivering total returns (income and capital) of -31,46%, the lowest of all the listed property funds. – Elma Kloppers, Sake24
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