South Africans are being priced out of holidaying in Cape Town

A growing segment of hotels in Cape Town targeting foreign tourists are becoming increasingly unaffordable for South Africans. This is particularly true of the V&A Waterfront, which is pursuing a strategy of owning more and more of its hotels going forward.

Some hotels in the city, like the new luxury hotel development at the waterfront’s Quay 7 (behind the existing Table Bay Hotel, towards the helistop) are explicitly for the very wealthy. More One&Only than Westin, for example.

In December and January in particular, Cape Town is not wallet-friendly to South Africans.

Flights are hellishly expensive. Try R7 000 return per person for a ‘last minute’ five-night six-day trip after Christmas Day, returning after New Year’s Day. Soon, that’ll be R8 000. And then the number of available seats will dry up completely.

A midsize rental car such as a Toyota Corolla Cross will set you back a further R13 000.

That’s nearly R30 000 for a couple, just to get there and to be able to get around.

(Although hiring a car in Cape Town over this period makes very little sense, especially if you’re staying somewhere centrally, given the near-constant congestion).

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Then there’s accommodation …

Moneyweb costed a five-night stay (including a weekend) in late January for two adults. This period was deliberately selected as it is after schools return for 2025 but is still in season.

Within the Waterfront precinct, the prices for a Tuesday-to-Sunday stay stretch from R280 000 at the One&Only and R190 000 at The Silo Hotel, down to the roughly R25 000 level at the Breakwater Lodge (a Protea/Marriott property) and AC Hotel by Marriott, on the harbour side nearest the Cape Town International Convention Centre (CTICC).

The R280 000 for five days sounds insane (as does the R190 000), but that works out to R28 000 per night per person, which is about $1 500.

Pricey, but relatively comparative to similar hotels globally. At The Silo Hotel the price per night is around $1 000. The Cape Grace, managed by Fairmont, is around half this rate per night ($500).

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Then there is a cluster of hotels – The Table Bay Hotel, the Queen Victoria Hotel, and the Radisson RED – where the average rate per night works out to $250 or slightly lower.

Following its R1 billion refurbishment and conversion to an InterContinental property, which will be managed by Sun International, the V&A sees scope to achieve double the rate currently being achieved by The Table Bay Hotel.

Even as one moves into the city bowl, rates remain steep.

The Mount Nelson, an iconic property, competes in the same kind of segment as The Silo Hotel and The Cape Grace (around R15 000 a night per person).

The Westin (adjacent to the CTICC), the Taj Hotel and the Hyatt Regency (formerly the Hilton) are all in the same bracket as The Table Bay Hotel, Queen Victoria Hotel and Radisson RED (R3 000 per night per person).

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After that it does get cheaper, with the Southern Sun Waterfront at around R24 000 for the stay (R2 500 per person per night), Sun Square City Bowl at R18 000, Southern Sun Cape Town (the old Cape Sun) at R16 000, and The Pullman (previously Radisson Blu Hotel and Residence, converted from offices) at roughly that level too.

Hotel Sky and Southern Sun Stay Easy City Bowl are both at a very modest R9 000 for the stay (R1 000 per person per night), but the latter is squarely an ‘economy’ hotel, according to owner Southern Sun. The City Lodge at the V&A Waterfront, which is busy being refurbished, sits slightly above this rate.

There are alternatives such as The Onyx (Newmark) at R16 000 and The Rockefeller at R14 000, which are both apartment hotels – a slightly different offering.

And of course Airbnb is an option, but these short-term rentals are a very contentious issue given their impact on housing prices (purchase or rental) for local residents.

Plus, there are indications that the Department of Tourism will start cracking down on short-term rentals, which will likely further constrain supply. A move such as this is not any different to ones implemented by other cities (Barcelona) and countries globally.

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The harsh reality

With accommodation, that five-night stay for two in January starts at R40 000 and stretches upwards to R55 000 – or higher. The numbers just don’t make sense.

Don’t even bother trying to visit Cape Town at the start of February, when it’s Mining Indaba. Rates for The Table Bay Hotel (which will only close for its refurbishment after the Indaba), as an example, are already 33% higher than the January dates.

Soon, there won’t be a bed to be found in any decent hotel in the city bowl. Even as it continues to add beds, Cape Town does not have an adequate number of hotels for a city its size.

Then there’s the joke – is it a joke? – that many Cape Town establishments have a different, pricier menu for tourist season.

The going rate for 500ml draughts in Bree Street nowadays is R65 (you may get away with R60). Good luck finding a glass of decent wine for less than that. Cocktails are easily R150-and-up. Starters also tend to hover in that R150 range, with mains mostly starting at R300.

The new Marble Cape Town, which has just opened in the Union Square building at the Waterfront, is certainly not aimed primarily at Capetonians. Given its stunning location, this restaurant makes its Rosebank sibling look plain by comparison. It would’ve required tens of millions of rands in investment, and the business case will require certain standards (food, drinks, staff and ambience), which necessitate certain margins. It will almost certainly be fully booked for months to come.

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The ‘new’ Cape Town

The reality is that Cape Town is competing with international destinations like Dubai, Berlin, London, Madrid, New York, Rio de Janeiro, Paris, Istanbul, Tokyo and Venice.

Pricing – and offerings – need to be seen in the context of that. This means that it is, and will all but certainly remain, unaffordable for most South Africans, even those who are relatively affluent.

This is a classic supply and demand story.

It’s common chatter around the braai at this time of year that it is cheaper to holiday in Mauritius over the festive season than in Cape Town. If you booked a few months ago, sure. A lot of destinations look substantially more attractive (and kinder on one’s wallet) than Cape Town over December. That’s why the whole Garden Route is already bursting at the seams, and it’s not even the middle of the month.

This article was republished from Moneyweb. Read the original here.