Luxury hotels do well as prices cut

Fancy new hotels gave lowergraded establishments a run for their money over the festive season in Cape Town, dipping into their market by offering special deals to both local and international guests.

While hotels generally reported a good festive season, some said they were rushed off their feet and were grateful for a small breather before the next onslaught in February, when European visitors traditionally flock to the city.

Hoteliers reported they were looking forward to major upcoming events such as the Cape Argus Pick n Pay Cycle Tour, the opening of Parliament, the J&B Met, the Cape Town International Jazz Festival and the Two Oceans Marathon, all of which traditionally bring millions of rand into the city's economy.

Last year, nine five-star hotels opened in Cape Town, adding 1 500 extra beds. The number of deluxe rooms nearly doubled, from 1 100 to 2 400, over an 18-month period
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Because of the recession, five-star hotels were forced to lower their rates, offer specials and add incentives to lure those who would normally go to four-star establishments.

Four-star hotels, in turn, had to go the extra mile to retain their clients and to snap up new ones.

Hotels said they were also far more open to negotiating room rates.

Leisure Hotels, which includes the Fountains, Lady Hamilton, Tulip and the new Strand Tower Hotel, is concentrating on building relationships with guests, said group marketing and revenue manager Sedick Adams.

He said they had had a 70 percent occupancy rate over the festive season.

"You can choose; you can have high occupancy with low rates, or low occupancy with high rates. There is a big fight out there for business right now. Five-star hotels are cutting into the four-star market. We are therefore concentrating on building personal relationships with our guests, as we often cannot compete with the offers out there," he added.

Compared to the previous season, Adams said they had done "okay", considering that fancier hotels had dropped their rates to attract customers.

Nick Seewer, chief executive of the Pepper Club Hotel and Spa, said it had had a good festive season, and had been very busy from December 18.

"We had a 90 to 95 percent occupancy rate right up until January 4. It is quieter now, but we will be extremely busy from January 22 up until the end of March," he said.

On negotiating rates, Seewer said they could get the rates they charge over the busy season, but that there was "more negotiation" at the end of the season.

Danny Bryer, director of sales, marketing and revenue for the Protea Hospitality Group, said they had offered several specials, and had found the season to be slightly shorter. Normally, guests started arriving from December 20, with the season ending on January 4. But he said they got busy only from December 24, and were quieter after January 3.

"December did meet our expectations, and we are expecting a very busy February, when European visitors normally come. Additionally, corporate travel also picks up in February," Bryer added.

Roy Davies, who chairs the hotels division of the Federated Hospitality Association of Southern Africa (Fedhasa), said: "Occupancy at the top end of the market is on a par with the previous year. It has been reasonably good, but that is because hotels offered lower rates. It is not so rosy for threeand four-star hotels."

The addition of new hotels had driven down room rates.

Cape Argus Business

Posted at 09:23AM Jan 11, 2011 by Editor in Industry  |