The South African hotel industry achieved dynamic performance in March 2025, as detailed in the latest STR report. This article provides a detailed analysis of national trends, star category performance and regional variations compared to March 2024 by examining this article (baby birth (OCC%), average daily rates (ADR), and revenue per room available).
National Performance: Resilience amid subtle changes
Nationally, the South African hotel sector reported a small occupying DIP of 0.2% to 64.0% in March 2025, compared to 64.1% in March 2024. Despite this, the industry showed strong pricing power, with ADR increasing by 7.6% to ZAR 1,981.85 and RevPAR increasing to ZAR 1,267.68. Room revenues rose 7.3%, reflecting stable demand across a sample of 241 properties and 31,082 rooms, from 431 properties and 52,766 rooms census.
YTD's performance was even more robust, with occupancy rising from 0.8% to 61.3%, ADR rising 9.6% to ZAR 2,159.92 and RevPAR rising 10.5% to ZAR 1,323.58. Room revenue YTD rose 10.9% with a 1.2% increase in rooms sold. These figures highlight a resilient market, supported by strategic pricing and sustained traveler interest, even when occupancy is almost flat.
Star Category Breakdown: Luxurious Profits, Stable Middle Class
5 Star Hotels: Premium Pricing Offset Lower Occupancy
The gorgeous segment reduced its occupancy of 3.9% to 65.7%, but took advantage of an increase in ADR of 9.4% to ZAR 3,974.71 and acquired a RevPAR gain of 5.1% to ZAR 2,611.90. Room revenues increased gently 2.9% despite a 6.0% decline in rooms sold. YTD data showed stronger images, with ADR increasing by 12.9% to ZAR 4,451.00 and RevPAR rising by 8.1% to ZAR 2,918.23, while occupancy fell by 65.6% from 4.3%. The ability to command the segment's premium rates highlights the appeal to luxury travelers, with 46 properties and 5,996 rooms sampled.
Four Star Hotels: Stable Demand with Strong Revenue Growth
The four-star category maintained a close occupancy rate of 65.2% (-0.4%), while an ADR of 10.1% increased to ZAR 1,804.03, which encouraged a RevPAR rise of 9.6% at ZAR 1,176.00. Room revenues increased by 10.4%, supported by a 0.3% increase in rooms sold. YTD's performance was similarly strong, with occupancy rates increasing by 0.5% to 63.1%, ADR increased by 10.8% to ZAR 1,891.14, and RevPAR increased by 11.4% to ZAR 1,192.66. The consistency of this segment, representing 94 properties and 12,596 rooms, is the basis of the market.
3 Star Hotel: Conservative Profits for the Overall Metric
In the 3-star segment of the middle tier, occupancy increased by 0.7% to 62.7%, ADR increased by 6.1% to ZAR 1,277.34, and RevPAR increased by 6.8% to ZAR 800.92. Room revenues increased by 6.9%, reflecting occupancy. The YTD figures were particularly strong, with occupancy rates increasing by 3.2% to 58.9%, ADR increased by 7.3% to ZAR 1,309.62 and RevPar climbing 10.7% to ZAR 771.89. With 69 properties and 9,114 rooms sampled, the affordable prices in this segment continue to attract budget-conscious travelers.
Regional Performance: Contrasting Destiny
Western Cape: The Great Growth
The Western Cape emerged as a standout, with occupancy rates increasing by 2.7% to 75.8%, ADR increased by 10.9% to ZAR 3,079.87, and RevPAR increased by 13.9% to ZAR 2,334.86. Room revenues increased 11.7% despite room availability dropping by 2.0%. The YTD metric showed a ZAR 2,657.92 with an occupancy rate of 2.2%, a 77.4% increase in ADR, a 15.0% increase in ZAR 3,432.93, and a 17.5% increase in RevPAR to ZAR 2,657.92.
Cape Town: The city led the region, with 4.0% occupancy rising to 77.1%, ADR rose by 11.6% to ZAR 3,615.64 and RevPAR surged to ZAR 2,787.68 at 16.1%. The 5-star segment was exceptional, with ZAR 4,491.92 gaining 6.3% occupancy and 19.5% increase in RevPar. The 4-star segment also performed strongly, with RevPar increasing by 20.5% to ZAR 2,122.21. Wineland: Occupancy rose 2.4% to 70.9%, ADR increased 14.7% to ZAR 2,969.91, and RevPAR increased 17.5% to ZAR 2,104.60, indicating strong demand for this scenic destination. Garden Route: The area faced challenges, despite an increase in ADR of 13.7%, occupancy rate decreased by 12.4% to 63.5% at ZAR 1,228.18, with RevPar facing nearly flat (-0.4%).
Eastern Cape: Amazing Surge
The Eastern Cape was contrary to expectations, with occupancy rates jumping from 14.4% to 67.4%, ADR increased by 6.9% to ZAR 1,129.23, and RevPAR jumping to ZAR 761.41 to 22.4%. YTD RevPar increased by 13.2% to ZAR 676.54.
Port Elizabeth: The city is a key driver, with an occupancy of 15.2% increased to 69.7% and a 27.3% RevPAR rise to ZAR 828.06 increased by 10.6% to ZAR 1,187.98. This suggests an increase in appeal, perhaps related to domestic tourism and business events.
Kwazulu-natal: The challenge of luxury, the resilience of the middle class
Kwazulu-natal faced headwinds, occupancy fell 4.9% to 54.5%, while RevPar fell 9.4% to ZAR 697.87. Room revenue fell 5.6%, while room availability increased 4.2%.
5 Star Hotel: Luxury segment struggled, 26.3% occupancy reduced to 43.4%, RevPAR reduced by 41.8%, room availability increased by 48.4%. Four Star Hotel: In contrast, this segment shined, with 5.5% occupancy increasing to 66.3% and RevPAR increasing by 2.9% to ZAR 683.09. Durban: Occupancy fell 9.0% to 50.6%, but 5.7% ADR increased to ZAR 891.42 with ZAR 450.76. Umhlanga: Occupancy rates immerse from 3.2% to 60.3%, while RevPar has dropped by 11.4% to Zar 975.48, reflecting the pressures of pricing.
Gauteng: Stable performance with strong pockets
Gauteng's occupancy rate was almost flat at 59.3% (-0.5%), with ADR rising by 8.1% to ZAR 1,424.07, and RevPAR rising by 7.6% to ZAR 844.70. YTD RevPar increased by 11.0% to ZAR 773.59.
Sandton: At the Business Hub, the stable occupancy rate was 60.3% (+0.2%), up 10.5% to ZAR 873.34. The four-star segment is excellent, with ZAR 982.79 gaining 6.6% occupancy and 16.7% increase in RevPar. Pretoria and its surroundings: Occupancy rose 0.6% to 57.9%, while RevPar rose 5.2% to ZAR 734.49, but room revenue growth was modest at 0.9%. Johannesburg: Occupancy was stable at 51.2% (-0.5%), with RevPar increasing by 7.6% to ZAR 689.38, driven by an 8.1% increase in ADR.
Other Regions: Mixed Results
Limpopo: Occupancy rate increased by 3.2% to 68.3%, while RevPar increased by 11.3% to ZAR 823.59, reflecting strong demand. Northwest: Occupancy fell by 8.7% to 60.7%, while RevPar dropped 7.5% to ZAR 1,314.50 despite an increase in ADR by 1.4%. MPUMALANGA: Occupancy fell by 5.1% to 52.3%, while RevPAR reduced by 6.9% to ZAR 552.30, resulting in poor performance.
Key Insights: The Eastern Cape's Unexpected Momentum
The surprising 22.4% RevPar surge in the Eastern Cape, especially in Port Elizabeth, stands out as a highlight. This growth suggests that the region is gaining traction due to an increase in occupancy rates of 15.2% and an increase in ADRs of 10.6%, with an increase in domestic tourism, business meetings, or infrastructure improvements. This contrasts with Kwazulu-Natal's luxury segment struggle, highlighting an uneven recovery across the South African hospitality market. The Eastern Cape performance requires further investigation to understand the drivers behind its success.
Strategic Implications for Stakeholders
Leverage premium pricing: The ability to drive ADR growth in the 5-star segment suggests room for targeting net-heavy travelers through tailored experiences, even when occupancy is low. Addressing the challenges of Kwazulu-Natal: There is a demand for a sudden decline in luxury segments for target marketing or operational adjustments to recover demand, while leveraging the resilience of the 4-star property. Promoting new destinations: Eastern Cape Surge offers the opportunity to sell Port Elizabeth and its surrounding areas as a vibrant alternative to traditional hubs. Maintain Cape Town's momentum: Continuous investment in Cape Town's infrastructure and tourism campaigns can solidify its position as a global destination. Optimize mid-tier offering: Consistent performance in the 3-star and 4-star segments demonstrates strong demand for value-driven options ideal for attracting domestic and budget-conscious travelers.
In March 2025, we introduced the South African hotel industry to navigate complex landscapes with resilience and opportunity. While national occupancy was almost flat, the profits of ADR and RevPar show confidence in robust pricing. The Western Cape and Eastern Cape emerged as growth leaders along with the gorgeous segments of Cape Town and Port Elizabeth's unexpected surge setting benchmark. Conversely, Kwazulu-Natal's luxury challenges highlight an area of strategic focus. As the industry evolves, leveraging local strengths, addressing low-performance segments, and adjusting to traveller preferences is key to maintaining growth.
Source: 2025 STR, LLC/STR Global, Ltd.
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