Hotels in urban areas pocket lion's share of SA's World Cup spoils
July 26, 2010 Edition 1
Ethel Hazelhurst
Hotels and others offering accommodation during the World Cup did very well out of the event, according to Cobus Venter, a director at Econex.
Venter said two sources had indicated that the sector did "very well". One source was the Portfolio Collection, an independent group of hotels, lodges and bed and breakfast providers. The other was STR Global, an international consulting company.
He said data from these sources showed hotels in urban areas did well. But bed and breakfast establishments did less well, especially those away from the major centres.
He said the accommodation sector would have done even better if prices were not as high. He warned: "Over time prices have increased too much and the local industry has lost its competitive edge."
The World Cup success for the sector came despite much lower estimates of arrivals than those made well before the event. Initial estimates of more than 480 000 visitors, made two years ago, were dropped to little more than 370 000 earlier this year.
Venter said reliable indicators pointed to a probable maximum of 200 000 if land arrivals were not taken into account. "This implies that there were only 70 000 more than June 2009," Venter said.
FNB Home Loans strategist John Loos said that, contrary to expectations, the event might have had a short-term negative impact on local property demand. He said some estate agents surveyed in May had expected people would be so caught up in the event that they would not buy homes.
Finance Minister Pravin Gordhan last Thursday gave a wider perspective on the World Cup's contribution to economic growth. He said that the |government estimated it would add a half percentage point to economic growth this year.
But he said: "When we take account of the spending on stadiums and infrastructure since 2006, we find that the level of gross domestic product is about 1 percent higher than it would have otherwise been."
