The South African hotel industry introduced a mix of resilience and growth in January 2025, as revealed in CoSTar Group's latest STR report. This comprehensive analysis is based on data collected from a sample of 432 census properties and 240 properties nationwide, with occupancy rate (OCC%), average daily rate (ADR), and available rooms. Provides insights about revenue per (RevPar), and annual revenue per year. Annual performance shift. Measured on the South African Rand (ZAR), the report highlights trends at national, regional and star rating levels for January 2025 compared to January 2024.
National Overview: Grow steadily with moderate profits
The South African hotel market showed positive growth in January 2025. The national occupancy rate has risen from 54.8% to 54.8% from 54.0% in January 2024, a modest increase of 1.6%. Even more noticeable, ADR rose 10.6% from ZAR 2,045.74 to ZAR 2,262.10, and RevPAR increased 12.3% from ZAR 1,104.13 to ZAR 1,240.13. Room revenue increased by 13.1%, supported by a 2.3% increase in rooms sold and a mere 0.7% increase in rooms available. These figures reflect robust demand strengthened by higher rates, indicating confidence in the market despite inflationary pressures.
Star Rating Breakdown: Diverse Performances Between Segments
5-star hotels: The luxury segment saw an occupancy rate of 64.8% to 62.5% (-3.5%), offsetting this decrease with a significant increase in ADR from ZAR 4,057.60 to ZAR 4,558.31. RevPar was supported by a 8.4% increase to ZAR 2,850.70 and a 12.5% increase in room revenue. The segment's ability to command higher rates underscores its appeal to high-end travelers.
Four Star Hotel: Occupancy remained almost flat at 57.0% (down 0.3% from 57.2%), but ADR rose 10.1% to ZAR 1,887.13 and a RevPAR gain of 9.8% to ZAR 1,075.62. This stable performance suggests reliability in the medium-to-tier market.
3-Star Hotel: The budget segment surpassed its colleagues, with an occupancy rate of 7.2% increased from 48.1% to 51.6%. Coupled with a 7.5% ADR rise to ZAR 1,319.88, RevPar surged by 15.3% to ZAR 680.83, reflecting strong demand for affordable accommodation.
Regional highlights: The Struggle of Mpumalanga, Western Cape Lead
Performances vary widely across South African states.
Western Cape: The region, home to Cape Town, recorded its highest occupancy of 74.2% (up 1.8% from 72.8%), with ADR rising 15.8% to ZAR 3,451.62. RevPAR was driven by a strong show in Cape Town with an occupancy of 75.4% and a RevPAR increase of 21.0% to ZAR 3,027.55, with an increase of 18.0% to ZAR 2,560.58. The attraction of tourism, especially in the summer, has fueled these benefits.
Kwazulu-natal: Occupation rose from 50.5% (+4.2%) to 52.6%, while ADR fell slightly to 1.2% to ZAR 1,400.44. RevPAR increased by 3.0% to ZAR 736.76, while Durban showed a RevPAR gain of 14.6% to ZAR 490.14. The mixed results in this region reflect a variety of demand dynamics.
Gauteng: Economic Hub recorded an occupancy of 6.1% at 44.2%, with ADR increasing by 7.9% to ZAR 1,426.82, resulting in a 14.5% increase in RevPAR to ZAR 631.17. Sandton (RevPar: Zar 640.10, +12.7%) and Pretoria (RevPar: Zar 528.17, +19.3%) highlighted Gauteng's business-driven recovery.
Mpumalanga: The region faces challenges, with occupancy plunging from 51.3% to 24.8% to 38.5%. Despite an ADR increase of 6.0% to ZAR 1,103.80, RevPAR fell 20.3% to ZAR 425.37, indicating a sharp decline in tourist traffic, possibly due to seasonal or economic factors.
City Spotlight: Cape Town, Durban, Johannesburg
Cape Town: Cape Town's revpar, an outstanding performer, rose 21.0% to Saar 3,027.55, while four-star hotels rose 25.4% to ZAR 2,091.69. The fusion of city leisure and business has solidified its position as a premier destination.
DURBAN: Occupancy rate is 3.9% to 51.6%, ADR is 10.3% increase to ZAR 950.56, and Durban's RevPar is 14.6% increase, reflecting the stable coastal appeal.
Johannesburg: Occupancy rose to 30.4% (+7.6%), ADR rose by 7.0% to ZAR 1,502.91, and RevPar increased by 15.1% to ZAR 456.37. City recovery suggests rebounds for urban travel.
Meaning and outlook
Data for January 2025 illustrates the South African hotel industry taking advantage of higher rates and growth in selective demand. While the Western Cape advantage underscores the importance of tourism hotspots, Gauteng's interests indicate a strengthening of the business travel sector. However, Mpumalanga's decline and uneven regional performance suggest challenges in balancing supply and demand across the country. The robust growth of the 3-star segment shows a growing market for budget-conscious travelers. This is a trend worth watching.
As South Africa navigates its economic and seasonal dynamics, the hotel industry's ability to maintain ADR growth while addressing occupancy disparities is critical. This analysis was conducted by STR, LLC, STR Global, Ltd. Using data sourced from, we provide important benchmarks for stakeholders with the goal of optimizing performance in 2025.
Note: All currency figures are in ZAR (South African Rand). The data reflects a sample of 31,071 rooms from 240 properties from the 53,190 rooms census across 432 properties. For more information, see the 2025 STR Report©Costar Group.
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