Thursday, July 28, 2011

Are our Hotels too expensive??

In the wake of learning that another Top Hotel is closing its doors I thought about it for some time and wondered why?? Speaking to many of my friends and colleagues about travelling and how expensive it is, most of them complain about the cost of their accommodation. One thing is true and that is the cost of South African hotels. I am sure that there will be someone in the hospitality industry that can tell us why and what the factors are, but comparing our rates to the rest of world tells a different story.
If I can use the USA and compare their rates with what is in South Africa you will be very surprised…even if you have to pay in US$. They have a huge number of websites to choose from where you can go and select the area, hotel rating, amenities etc that you would like. I just did the following as an example:

On I selected Chicago and put in the dates 29 July – 1 Aug. My options were the following:

4.5* at O’Hare Airport which is about 16km from Chicago City Centre $81=R550

4* on Magnificent Mile - $109=R741 (Oprah's favourite shopping strip)

I did the same on a popular local Hotel Group website and chose Cape Town and the rates I got was R1079 per night and this was not 4* or more.

For between R300 – R650 I could stay cheaper in Chicago than in Cape Town and remember that if I had to refine my search and choose a lower rating hotel the cost will come down even more. There are many of these websites and you can get amazing deals on them with unbelievably low prices.

Personally, I don’t know enough about the cost of managing hotels and their daily running cost, but I just find it very strange that even paying in US Dollar I can stay cheaper abroad. Now the Tourism Bureau and everyone are up in arms and cry for help because so many hotels are closing down. South Africans expect to pay more for accommodation when we travel in Europe and North America because we have to pay in Euro or Dollar. I don’t think Americans or Europeans view South Africa as a cheap holiday destination anymore and therefore they choose to travel to South America, Indonesian Islands or even Australia. Maybe even other African countries who knows.

The hospitality industry will have to look at the competition out there and adapt accordingly. Just like our Wine Industry has to be aware of what other countries do and charge for their products. It is tough out there and it is not going to get any easier. Rather have a bum in your bed at a discounted/better rate than nothing at all!!!