Sandton Poised for Major Business Travel Surge September 4th, 2024
Sandton Poised for Major Business Travel Surge
Hoteliers in Sandton are optimistic that the precinct’s robust conferencing schedule, including the upcoming G20 Summit, will help improve the currently low average room rates (ARRs).
Recent data from Smith Travel Research, covering January to May, shows that five-star hotels in Sandton, often referred to as “Africa’s richest square mile,” are experiencing ARRs significantly below the national average. Currently, Sandton's ARR stands at R1,411 (€71), which is only 49% of the national average and 23% lower than rates seen in 2019 before the COVID-19 pandemic. In comparison, KwaZulu-Natal has an ARR of R2,867 (€145), and Cape Town leads with R4,104 (€208), both surpassing their 2019 levels.
On a more positive note, Sandton’s high-end hotels have achieved an occupancy rate of 66%, which is higher than the 62% recorded during the same period in 2019. However, the 2024 Tourism Trends report by advisory firm BDO suggests that hotel operators are “clearly sacrificing rate in favour of occupancy.”
Francois van Heerden, Chairperson of the Sandton Tourism and Business Association (STBA), expressed concerns about the challenges facing Sandton hotels, particularly those at the upper end of the pricing spectrum.
“Safety remains a key concern in Sandton, as does urban decay, control of taxi associations with the need for safe taxi zones, and improved marketing of Sandton as a travel destination. Rosebank and Waterfall City are starting to make inroads as new destinations and trendy hubs,” said Van Heerden.
G20 Summit to Catalyse MICE Sector
Mandy Watson, representing the STBA Secretariat, noted the encouraging increase in events at the Sandton Convention Centre (SCC) over the past six months. This momentum is expected to continue into 2025 and 2026.
“The SCC has a very high repeat business model with clients securing dates by committing several years in advance. Although this limits the space to accommodate new large events, there is an ongoing drive to secure new events into the future and to bring them to the SCC,” Watson said.
She highlighted the securing of the 2025 G20 Summit as a significant achievement for the sector.
“Obviously, this is the big talking point at the moment and, although definitely still in the planning phase, an influx of related events and meetings is expected. The benefits of these events will be far-reaching, impacting more than just the SCC, as hotels will likely benefit from the influx of delegates coupled with exposure of the country.”
The business travel sector is also anticipating a recovery from a period of reduced government travel spending and financial support for conferences.
“There seems to be a 'wait-and-see' approach among exhibition organisers, and funding is being reviewed far more rigorously than in the past,” Watson added.
She mentioned that South African Tourism, the South African National Convention Bureau (SANCB), and the Gauteng Tourism Authority (GTA) could play a crucial role in helping the SCC attract more international trade shows and events.
Watson also pointed out that the outlook for Sandton is further boosted by major new hospitality investments, including the recent launch of Minor’s first NH Collection property on July 1 and the scheduled opening of a Hilton hotel in the fourth quarter of this year.
Call for Enhanced Marketing
Van Heerden emphasized the need for stronger collaborative marketing efforts with government departments and associations.
“As an association with a diverse membership, we have engaged with South African Tourism, the SANCB, and the GTA to collaborate and develop Sandton as a destination of note. Unfortunately, our efforts have been fruitless.”
The STBA had partnered with the GTA on a joint marketing campaign over the past year, but Van Heerden noted that the association was “unable to get any feedback” on its effectiveness.
“We are able to gather information and specials from members pretty quickly, so providing products that South African Tourism and the GTA could sell is easy for us,” he explained. “Our members are constantly looking to get involved in initiatives that will help to drive stronger GDP growth, as that would automatically feed positively into everyone's business.”
The need for enhanced safety and security measures remains a priority for Sandton’s tourism and business communities.
“Increased discussions between the South African Police Services, the Sandton Central Improvement District, and other stakeholders in the area would help. Weeding out street forex trading, which stimulates forex thefts, would also help, and there seems to be a need to improve the perception of Sandton, Johannesburg, and South Africa as a whole,” Van Heerden concluded.
Article Courtesy of www.tourismupdate.co.za/article/sandton-awaits-business-travel-boom