There has been a surge in the popularity of aparthotels in South Africa in recent years, which reflects in the statistics released by local property management company Propr, and hotel management software company RoomRaccoon.
Propr’s data reveals that aparthotels within its portfolio are outperforming the long-term rental rate, on a nett basis, by over 50%.
Max Urban, Co-Founder and MD of Propr, says the growing demand for high-quality accommodation within domestic and international travel markets has led to the emergence of serviced self-catering accommodation that offers the amenities of a hotel combined with the convenience of a lock-up-and-go apartment.
“Travellers are in search of accommodation that provides great work areas and also offers recreational spaces. Some are looking for a short-term stay, while others need a place for an extended period. Aparthotels cater for this type of traveller,” he explains.
Speaking of the popularity of aparthotels, Urban says guests can enjoy hotel amenities without hotel formality.
“Seamless check-ins, daily housekeeping, crisp fresh linen and stocking of fridges are just some of the amenities that guests can enjoy. They can stay one day, one month or even longer. Additionally, aparthotels typically offer great communal areas like pools, co-working spaces, gyms, coffee shops or rooftop decks where guests can meet other travellers.”
Urban further notes that aparthotels seem to be the accommodation of choice for digital nomads, as they are often much more affordable than alternative accommodation.
He points out that the trend of working from anywhere has resulted in there being 35 000 000 known digital nomads worldwide, which is expected to grow in 2023 and beyond. “This is a lucrative market for property owners to target.”
What the data reveals
On top of Propr’s encouraging data, RoomRaccoon’s analysis of 151 apartment suites in aparthotels in Cape Town, Johannesburg and Pretoria also shows growth.
RoomRaccoon’s aparthotels in these three major cities have recorded impressive occupancy rates in January this year, averaging 79%. This is well above the country average of 61%.
“According to our data, the demand for aparthotels is on the rise. In the last month, the average occupancy rate for aparthotels increased by 10%, with properties in Cape Town increasing by more than 20%,” says Niels Verspui, Country Manager for RoomRaccoon South Africa.
However, aparthotel revenue per available room (RevPAR) between these three cities has decreased by 24% in the last month, despite higher occupancy rates.
“To capitalise on the increased demand, aparthotels can adopt dynamic pricing tools. These tools determine room sell probability and optimally adjust the room price per booking channel accordingly. Hotels can strike the perfect price point for supply and market demand and get the best price for every room,” Verspui adds.
In terms of source markets for aparthotels in South Africa, the domestic market continues to dominate occupancy, with 22% of guests coming from within the country.
“However, our data shows that international guests are on the rise, with travellers from Germany, the Netherlands, the US and the UK becoming more prominent in Cape Town,” says Verspui.
Garnet Basson, COO of The Capital Hotels and Apartments, reinforces the attractiveness of aparthotels, revealing that its recent occupancy rates “have been excellent”.
“At the moment our occupancy rate is in excess of 82-96% across the group, with elevated figures for our Sandton and Pretoria properties,” Basson tells Tourism Update.
Rael Phillips, Co-founder and CEO of Totalstay, which operates a portfolio of aparthotels in Cape Town and Johannesburg, says its occupancy rates have also been “extremely encouraging”.
“Since Sept/Oct last year, we have been trading solidly between 92-95% occupancy for all of our aparthotels in Cape Town, with February sitting at 93% and March pacing well. Our annual occupancy is sitting at 83% portfolio wide,” Phillips informs Tourism Update.
Trends
Basson and Phillips both note that aparthotels are trending for bleisure travellers. Their business trips are lately being converted into a family stay, simply by adding a few days at the end and having the rest of the family join.
“On average, travel stays are slightly longer now and having an apartment allows you to stay with added convenience. Having a fully fitted kitchen with high-end appliances and easy access to hotel facilities in great locations makes it easy to stay longer. We find that aparthotels attract modern travellers who are looking for great value, without all the unnecessary frills,” Basson says.
Phillips adds: “The trend that followed on post-COVID and well into 2023 is that extended stays of blended work and leisure are now a constant and not a passing trend. This is relevant to both international and local markets. The products are dynamic enough to have someone stay for one night, a few weeks, or even a couple of months. Guests are actively seeking the freedom of DIY travel.”
In terms of amenities, co-working spaces are currently dominating (this ranges from single workspaces to private deal rooms and boardrooms), according to Phillips.
