The South African hospitality industry remains a cornerstone of the nation’s economy, contributing significantly to tourism, employment, and regional development. The June 2025 hotel performance data, provided by STR, offers a detailed snapshot of the sector’s health, capturing key metrics such as Occupancy Rate (Occ %), Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR). These indicators reflect the interplay between demand, pricing strategies, and market dynamics across South Africa’s diverse regions and hotel categories. This article provides an in-depth analysis of the June 2025 performance compared to June 2024, explores year-to-date (YTD) trends, and highlights regional and star-rating-specific insights.
National Performance: A Steady Climb with Pricing Power
South Africa’s hotel industry in June 2025 showed a nuanced performance, balancing a slight occupancy dip with robust gains in pricing. The national occupancy rate edged down by 0.4% to 55.4% from 55.6% in June 2024, suggesting a marginally softer demand environment, possibly influenced by seasonal factors or economic pressures. However, hotels offset this by increasing their Average Daily Rate (ADR) by 7.5% to ZAR 1,689.49 from ZAR 1,571.91, which drove a 7.1% increase in RevPAR to ZAR 935.46 from ZAR 873.73. This growth in RevPAR, primarily fuelled by higher rates rather than occupancy, indicates that hotels are successfully targeting higher-paying guests, possibly through enhanced offerings, targeted marketing, or improved guest experiences.
Year-to-date (YTD) figures for 2025 paint an even more optimistic picture. Occupancy rose by 1.2% to 59.4% from 58.7%, while ADR climbed by 9.4% to ZAR 1,976.27 from ZAR 1,806.15. This resulted in a 10.7% RevPAR increase to ZAR 1,172.96 from ZAR 1,059.47, reflecting sustained demand and pricing strength over the first half of 2025. The sample data, covering 231 properties and 30,148 rooms (out of a census of 429 properties and 52,677 rooms), suggests a representative dataset for these trends.
Key Insight: The ability to increase ADR by 7.5% in June and 9.4% YTD despite flat or slightly declining occupancy highlights the industry’s shift toward premiumization. Hotels are likely capitalizing on South Africa’s appeal as a value-for-money destination for international tourists while catering to a growing domestic market seeking quality accommodations.
Performance by Star Rating: A Tale of Divergent Strategies
5-Star Hotels: Premium Pricing Amid Occupancy Challenges
The 5-star hotel segment faced a challenging June 2025, with occupancy declining by 5.8% to 55.3% from 58.7% in 2024. This drop may reflect reduced demand for luxury accommodations, possibly due to economic uncertainties or shifts in traveller preferences toward more affordable options. However, the segment demonstrated strong pricing power, with ADR surging by 16.2% to ZAR 3,433.49 from ZAR 2,955.00, leading to a 9.4% RevPAR increase to ZAR 1,898.69 from ZAR 1,735.21. The YTD data shows a similar trend, with occupancy down by 3.8% to 62.5%, but ADR and RevPAR up by 13.6% to ZAR 4,000.56 and 9.2% to ZAR 2,498.41, respectively. The sample of 42 properties (5,399 rooms) out of 72 properties (8,199 rooms) underscores the segment’s focus on high-value guests.
Notable Observation: The significant ADR growth suggests that 5-star hotels are targeting affluent travellers, possibly through exclusive packages, unique experiences, or enhanced amenities like spa services or fine dining.
4-Star Hotels: Balancing Occupancy and Rate Growth
The 4-star segment performed strongly, with a 2.5% occupancy increase to 56.5% from 55.1% and an 8.9% ADR rise to ZAR 1,507.98 from ZAR 1,384.74, resulting in an 11.7% RevPAR increase to ZAR 851.58 from ZAR 762.61. This balanced growth reflects the segment’s appeal to both leisure and business travellers seeking quality at a more accessible price point than 5-star properties. YTD, occupancy grew by 1.5% to 61.0%, with ADR and RevPAR up by 11.6% to ZAR 1,756.93 and 13.2% to ZAR 1,071.56, respectively. The sample of 91 properties (12,406 rooms) out of 176 properties (21,791 rooms) indicates robust participation in this category.
Key Takeaway: The 4-star segment’s ability to grow both occupancy and ADR positions it as a sweet spot for South African hotels, catering to a wide audience while maintaining profitability.
3-Star Hotels: Stability and Value
The 3-star segment maintained near-flat occupancy at 55.0% (up 0.4% from 54.8%), with a 6.0% ADR increase to ZAR 1,214.51 from ZAR 1,146.01, driving a 6.4% RevPAR rise to ZAR 667.76 from ZAR 627.70. This stability underscores the segment’s appeal to budget-conscious travellers, including domestic tourists and cost-sensitive international visitors. YTD, occupancy rose by 3.3% to 57.3%, with ADR and RevPAR up by 6.4% to ZAR 1,268.38 and 9.9% to ZAR 726.67, respectively. The sample of 66 properties (8,967 rooms) out of 119 properties (16,278 rooms) reflects a strong representation of this category.
Insight: The consistent performance of 3-star hotels highlights their role as a reliable option for travellers seeking affordability without sacrificing essential amenities.
Regional Analysis: Diverse Performance Across South Africa
Western Cape: A Tourism Powerhouse
The Western Cape stood out as a top performer in June 2025, with occupancy rising by 7.1% to 52.2% from 48.7%, ADR increasing by 6.7% to ZAR 2,434.13 from ZAR 2,280.94, and RevPAR surging by 14.3% to ZAR 1,270.70 from ZAR 1,111.31. Cape Town, the region’s flagship destination, drove much of this growth, with an 11.5% occupancy increase to 53.4%, a 6.7% ADR rise to ZAR 2,906.70, and a 19.0% RevPAR jump to ZAR 1,552.10. Notably, Cape Town’s 3-star hotels recorded a remarkable 34.4% occupancy increase to 47.4%, despite a 5.1% ADR decline to ZAR 1,302.85, resulting in a 27.6% RevPAR surge to ZAR 617.96. The 4-star segment in Cape Town also shone, with a 12.7% occupancy increase to 56.4% and a 15.9% ADR rise to ZAR 2,034.56, leading to a 30.7% RevPAR increase to ZAR 1,146.53.
YTD, the Western Cape’s occupancy grew by 2.9% to 68.4%, with ADR and RevPAR up by 14.2% to ZAR 3,070.07 and 17.5% to ZAR 2,100.45, respectively. Cape Town’s YTD performance was equally strong, with occupancy up by 4.1% to 69.6%, ADR up by 16.7% to ZAR 3,639.23, and RevPAR up by 21.5% to ZAR 2,532.27. The sample of 78 properties (9,009 rooms) out of 144 properties (14,391 rooms) in the Western Cape ensures reliable data.
Highlight: Cape Town’s exceptional performance, particularly in the 3-star segment, suggests that the city is attracting a diverse range of travellers, from budget-conscious visitors to luxury seekers, drawn by its iconic attractions like Table Mountain and the V&A Waterfront.
Gauteng: Mixed Results in a Business Hub
Gauteng, South Africa’s economic powerhouse, showed mixed performance. Occupancy dipped by 1.3% to 57.3% from 58.1%, but ADR rose by 5.5% to ZAR 1,434.18, resulting in a 4.1% RevPAR increase to ZAR 822.02. Johannesburg was a standout, with a 10.3% occupancy increase to 55.1% and a 9.2% ADR rise to ZAR 1,366.35, driving a 20.4% RevPAR surge to ZAR 752.71. In contrast, Sandton faced challenges, with a 7.2% occupancy decline to 53.5% and a 6.9% RevPAR drop to ZAR 731.79, despite a marginal 0.3% ADR increase to ZAR 1,368.65. The East Rand performed well, with a 2.4% occupancy increase to 68.3% and a 9.0% ADR rise to ZAR 1,667.95, leading to an 11.7% RevPAR increase to ZAR 1,139.35.
YTD, Gauteng’s occupancy grew by 1.9% to 55.3%, with ADR and RevPAR up by 5.5% to ZAR 1,420.87 and 7.5% to ZAR 785.07, respectively. The sample of 75 properties (11,535 rooms) out of 130 properties (20,590 rooms) provides a solid foundation for these insights.
Insight: Johannesburg’s strong performance reflects its status as a business and leisure hub, while Sandton’s struggles may indicate oversupply or competitive pressures in the luxury market.
KwaZulu-Natal: Navigating Challenges
KwaZulu-Natal faced significant headwinds in June 2025, with occupancy dropping by 10.6% to 57.1% from 63.9%, ADR declining by 1.9% to ZAR 1,255.74, and RevPAR falling by 12.2% to ZAR 717.50. The 5-star segment was particularly affected, with a 42.7% occupancy plunge to 36.7% from 64.1%, though ADR rose by 3.6% to ZAR 2,618.78, resulting in a 40.7% RevPAR drop to ZAR 961.52. Durban, however, showed resilience, with a modest 3.0% occupancy decline to 57.8% but an 11.5% ADR increase to ZAR 942.37, leading to an 8.2% RevPAR rise to ZAR 544.94. Umhlanga saw a 12.8% occupancy drop to 60.7% and a 16.6% RevPAR decline to ZAR 940.40, reflecting challenges in this coastal area.
YTD, KwaZulu-Natal’s occupancy fell by 2.6% to 54.9%, with ADR up by 1.0% to ZAR 1,319.54 and RevPAR down by 1.6% to ZAR 723.92. The sample of 27 properties (3,646 rooms) out of 68 properties (8,179 rooms) suggests localized challenges.
Observation: The sharp decline in 5-star occupancy may reflect seasonal factors or competition from other coastal destinations, while Durban’s ADR growth indicates potential for recovery through targeted pricing strategies.
Other Regions: Pockets of Strength and Weakness
Free State: Recorded a remarkable 18.2% occupancy increase to 71.7% and a 9.2% ADR rise to ZAR 1,135.43, resulting in a 29.0% RevPAR surge to ZAR 814.44. YTD, occupancy grew by 8.8% to 63.8%, with RevPAR up by 18.4% to ZAR 720.14.
Limpopo: Saw a 5.3% occupancy increase to 61.3% and a 22.1% ADR rise to ZAR 1,278.25, driving a 28.6% RevPAR increase to ZAR 783.26. YTD, occupancy rose by 2.5% to 59.8%, with RevPAR up by 12.0% to ZAR 715.77.
Eastern Cape: Experienced an 8.9% occupancy decline to 53.1%, with RevPAR dropping by 3.8% to ZAR 575.87. Port Elizabeth saw a significant 22.6% occupancy drop to 45.1%, with RevPAR down by 17.4% to ZAR 497.48.
Mpumalanga: Faced a 5.2% occupancy decline to 52.3% and a 7.0% RevPAR drop to ZAR 565.89, indicating challenges in attracting visitors, possibly due to competition from nearby safari destinations.
Surprising Trends and Insights
One of the most striking trends is the exceptional performance of Cape Town’s 3-star hotels, which saw a 34.4% occupancy increase in June 2025. This suggests that Cape Town is becoming a magnet for budget-conscious travellers, possibly domestic tourists or international visitors seeking affordable accommodations in a world-class destination. Conversely, the dramatic 42.7% occupancy drop in KwaZulu-Natal’s 5-star hotels raises red flags about demand for luxury accommodations in the region, potentially due to seasonal fluctuations, economic constraints, or competition from destinations like the Western Cape.
Another notable insight is the Free State’s robust performance, with a 29.0% RevPAR increase driven by strong occupancy and ADR growth. This could reflect growing interest in lesser-known destinations as travellers seek unique experiences away from traditional hubs like Cape Town and Gauteng.
Economic and Market Context
South Africa’s tourism sector is benefiting from a weaker ZAR (17.7692 to the USD), making the country an attractive destination for international visitors seeking value. The strong ADR growth across most regions and star categories suggests that hotels are capitalizing on this trend by targeting higher-spending guests. However, challenges such as economic uncertainty, rising operational costs, and competition from alternative accommodations (e.g., Airbnb) may be impacting occupancy in certain areas, particularly in KwaZulu-Natal’s luxury segment.
The data also reflects the importance of domestic tourism, with 3-star and 4-star hotels showing resilience due to their appeal to local travellers. Government initiatives to promote tourism, such as marketing campaigns and infrastructure investments, may be contributing to the strong performance in regions like the Western Cape and Free State.
The South African hotel industry in June 2025 demonstrated resilience, with national RevPAR growth of 7.1% driven by strong ADR increases despite a slight occupancy decline. The Western Cape, particularly Cape Town, emerged as a standout, with robust growth across all star categories, while Gauteng showed mixed results, with Johannesburg outperforming Sandton. KwaZulu-Natal faced challenges, particularly in the luxury segment, but Durban’s ADR growth offers hope for recovery. Emerging regions like the Free State and Limpopo highlight the potential for growth in less saturated markets.
Looking ahead, the industry’s ability to sustain ADR growth while addressing occupancy challenges will be critical. Strategic investments in marketing, sustainability, and guest experience enhancements could further boost performance. The strong YTD RevPAR increase of 10.7% signals a positive trajectory for South Africa’s hospitality sector, positioning it as a key driver of economic growth in 2025 and beyond.
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