Cape Town’s hotel sector is experiencing a development rush not seen since the run-up to the 2010 FIFA World Cup. With cranes dotting the skyline and global flags vying for space above new front doors, industry observers are abuzz with talk of a golden age for South African hospitality. According to data shared at the recent Future Hospitality Summit Africa, more than forty hotels are currently in the pipeline for Cape Town alone – a figure that would spark concern almost anywhere else on the continent.
But what lies beneath this surge? Is it sustainable demand or just another cycle of hype destined to test investors’ nerves?
“Cape Town has always had something special,” says Guy Stehlik, Founder and CEO of BON Hotels. “This is a city where things work far better than most other metros across South Africa. Infrastructure holds up when it matters most; services get delivered; people take genuine pride in how they run things here.”
It’s precisely this sense of reliability – rare in many markets – that underpins current investor confidence. But Stehlik cautions against reading too much into surface-level optimism.
The numbers are certainly compelling: CoStar reports that Cape Town’s hotel sector achieved an occupancy rate of 72.5% – the highest in South Africa. Local tourism bodies have worked tirelessly over many years to earn this reputation and keep demand robust year after year.
However, Stehlik warns that such confidence can turn quickly if stakeholders don’t ask tough questions along the way: “I remember what happened back in the late nineties when Olympic fever swept through Cape Town,” he recalls. “Hotels started springing up everywhere on nothing more than hope for global attention, but then Athens was chosen instead – and reality came crashing down as oversupply dragged on occupancy rates for years afterwards.”
Despite headlines touting foreign investment pouring into Cape Town hospitality, Stehlik points out that local capital still shoulders nearly all project risk from start to finish: “South African developers read our market with far more accuracy than anyone working from an overseas office ever could,” he notes. “International brands bring management contracts and logos – but rarely put any real financial weight behind construction or operations themselves.”
This means that while international names may offer investor comfort (and easier loan approvals), they do not necessarily provide additional resilience once daily realities kick in.
While luxury properties near Table Mountain make headlines – and lifestyle concepts dominate industry buzz – Stehlik argues that long-term sustainability comes down to fundamentals: business travel demand and commercial node stability.
“Not many people want to talk about corporate demand when rooftop bars are making headlines,” he says candidly. “Yet Monday through Friday bookings keep properties viable year after year.” He points out that leisure relies heavily on seasons, exchange rates, and social media trends – all factors prone to rapid change – whereas corporate, government and domestic travel tends to provide steady room nights even during downturns.
Locations like regional towns benefiting from semigration patterns or business districts beyond traditional tourist corridors may lack glamour but deliver consistent weekday occupancy – the sort of stability that covers costs long after opening parties fade away.
What advice does Stehlik offer amid all this excitement? Focus on substance over style – or risk repeating past mistakes:
“Once initial excitement cools off, fundamentals become everything,” he stresses. “What keeps owners sleeping well during economic shocks isn’t Instagrammable rooftop bars – it’s repeat bookings driven by corporate clients who value reliability above fashion.”
As new projects continue apace across Cape Town – from aparthotels tapping into serviced apartment demand right through high-profile refurbishments – industry veterans like Stehlik urge developers and investors alike not to get lost in short-term shine.
“This city deserves its buzz, no doubt,” he concludes. “But ask yourself honestly: Are you building for ego or return on investment? Are you creating Instagrammable rooftop bars for Monday morning check-ins or something built truly built to last?”
