Dynamic pricing, along with the balancing of inventory, demand and the market environment, have proved to be a crucial factor in driving the overall growth of average daily rates (ADRs) for hotel groups. According to research from Statista, ADRs have grown from R1 280 (€62) in 2022, to R1 310 (€64) in 2023.

Hara Jackson, Sales Director of Legacy Hotels & Resorts (which has enjoyed a significant recent boost in ADRs), said that dynamic pricing was trumping traditional seasonal demand.

“Managing dynamic pricing is key. Demand has changed and it is no longer seasonal, so we actually should not talk about summer and winter but rather daily demand, which requires daily pricing. Cape Town is a good example. Who would have thought that winter 2023 in Cape Town would have days that demand summer pricing!”

Jackson added that selling to the right customer, at the right time and the right price, was essential.

“In order to balance value for money with the appropriate ADRs, there has to be a top and a bottom value, which is a win-win to a customer and a hotel. If this position is established by the hotel objectively upfront, neither customer nor hotel can feel cheated.”

Jackson said, within Legacy’s portfolio of 21 product offerings in South Africa, Namibia and Gabon, hotels in the Sandton node were performing particularly well, followed by those in Cape Town, the Pilanesberg National Park and Namibia.

According to tourist accommodation statistics from Statistics South Africa, average income per stay unit night sold in the hotel sector increased by 27% over December 2022 and January 2023 compared with December 2021 and January 2022. The latest figures, for April 2023, showed a 15.3% rise from April last year.