The five-star hotel market in Cape Town seems to be recovering following the recent post-Soccer World Cup slump, according to Danny Bryer, Director of Sales & Marketing & Revenue Management at Protea Hotels.

He says the market has turned, with government officials and corporates starting to travel again, conferences resuming and international leisure groups starting to come back. The hope is for a bumper summer season and a 2011 upswing following the city's heightened international profile following the World Cup. Bryer says Protea's newly built five-star Cape Town properties - 15 on Orange and Crystal Towers hotels - are "trading well less than 10 months after opening", bearing in mind that "any new hotels cannot not expect fantastic occupancies in the first six to 18 months of operation". This is because international tour operators will only include them in their 2011/12 brochures because they have to be viewed and inspected, while similarly companies will only consider tenders from new hotels once they have viewed and tried them out.  "In the light of this, 40% to 60% occupancy levels are good but Crystal Towers last month achieved 65% to 75%, while 15 on Orange is full at present and 60% booked for October." Cape Town's hotel sector is widely reported to be overtraded with a 20% overcapacity thanks to a pre-World Cup building boom. Disappointing occupancies of, on average, 55% during the event because of the world recession; the strong rand and a post-tournament lull coinciding with the traditional low season, have all resulted in five-star hotel prices coming under pressure and some premier hotels trading down into four- or even three-star price levels. Bryer warns against this, saying long-term under-trading erodes brand value. He believes most five-star hotels are holding their price points, while some discounting shows that hoteliers are becoming more realistic about their prices amid the recession. He believes the Cape hotel sector will not remain overtraded in time once the rand stabilises and the expected tourist boom happens. He declines to speculate that some five-star hotels will go out of business or be taken over by established hotel chains before recovery happens in full. Bryer says the biggest challenge for the five-star sector is to maintain price parity and its service culture. "The biggest challenge will be to take the success of the World Cup in terms of awareness of South Africa and turn it into sustained tourism growth." He believes the answer lies in continued hosting of international events and concerted marketing by SA Tourism.