Sandton expects business travel boom

Hoteliers expect a strong conference pipeline for Sandton, including securing next year's G20 summit, to provide a much-needed boost to lower average room rates (ARR) in the county.

According to data Smith Travel Research January-May five-star hotels in "Africa's richest square mile" faced ARRs that were well below the national average and 23% below pre-COVID-19 levels. Sandton's ARR of R1 411 is just 49% of the national average, with KwaZulu-Natal (R2 867) and Cape Town (R4 104) comfortably above 2019 levels.

On a positive note, the county's upscale hotel occupancy rate is 66%, up from the 62% achieved in January-May 2019. But as consultancy BDO highlights in its 2024 Travel Trends Report, data suggests hotel operators are "clearly sacrificing rates for occupancy."

Francois van Heerden, chairman The Sandton Tourism and Business Association (STBA) told Travel News that hotels at the top end of the price range need to raise their ceilings for the rest of the industry to follow suit, but are being hampered by a number of prevailing conditions.

“Safety remains a key issue in Sandton, as does the decline of the city, control of taxi associations with the need to create safe taxi zones and better marketing of Sandton as a tourist destination. Both Rosebank and Waterfall City are starting to emerge as a new destination/fashion hub,” said Van Heerden.

G20 summit to catalyze the MICE sector

Introducing STBA Secretariat, Mandy Watson said the revitalization of events at the Sandton Convention Center (SCC) over the past six months had been very encouraging and that momentum would continue into 2025 and 2026.

“SCC has a very a highly recurring business model where clients book dates, making commitments years in advance. While this limits the space available to host new major events, there is an ongoing commitment to ensuring that new events can be hosted in the future and hosted at the SCC.”

She said securing the 2025 G20 summit was a big win for sector.

“Obviously this is the main topic of conversation at the moment, and while it is expected that there will be a stream of related events and meetings, they are certainly still in the planning stages. The benefits of these events will be far-reaching and will affect more than just SCC, as hotels are likely to benefit from the influx of delegates coupled with the exposure the country will gain as a result.”

Business Travel Sector is also looking to emerge from a period of declining government travel spending and conference financial support.

“Exhibition organizers seem to be taking a wait-and-see approach, and funding is being looked at much more carefully than before,” Watson said.

“It would be great if we could see South African Tourism, the South African National Convention Bureau (SANCB) and the Gauteng Tourism Authority (GTA) helping SCC attract more international exhibitions and events.” .

Watson said the positive outlook for the county is also bolstered by new investment in the hospitality sector from major groups, including NH Collection's first property in Minor, which opened July 1, and a hotel opening planned for the fourth quarter Hilton.

Call for stronger marketing

Van Heerden said greater joint marketing efforts with government departments and associations are urgently needed.

“As an association with a diverse membership, we have previously partnered with SA Tourism, SANCB and the GTA to collaborate and develop Sandton as a popular destination. Unfortunately, our efforts were fruitless."

STBA ran one dual marketing campaign with the GTA last year, but the association was "unable to receive any feedback" on its effectiveness.

“We can gather information and special offers from members quite quickly, so providing products that both SAT and GTA can sell is a no-brainer for us. Our members are continually looking to engage in initiatives that will help drive stronger GDP growth as this will automatically have a positive impact on everyone's business.”

Enhanced safety measures remain a key talking point for Sandton's tourism and business communities.

Source: travelnews.co.za