Does Cape Town need more new hotels? More than 700 new rooms to come in next 2 years!


Tsogo Sun logoIt was a surprise to receive a media release from Western Cape Tourism Minister Alan Winde, welcoming the development of a new R680 million mega Tsogo Sun hotel in the city centre, adding 500 bedrooms to the city’s room stock in 2017!  Another 235 rooms will open in the V&A Waterfront, when the Radisson Red opens next year! Can the hospitality industry in Cape Town afford another 735 rooms when the oversupply of accommodation for the 2010 World Cup still affects every accommodation establishment?!

The Tsogo Sun hotel will be built on the recently demolished Tulip Hotel, on the corner of Strand, Bree, and Buitengracht Streets, with construction set to commence next month.  The Tsogo Sun complex will consist of two entities on the same property: a 200 room SunSquare, and a 300 room StayEasy, with banqueting and conference facilities. Minister Winde said about the new development: ‘I’m pleased that Tsogo Sun have decided to expand their offering in the city centre, which already includes The Cullinan, Southern Sun Waterfront and Southern Sun Cape Sun. Tsogo Sun’s continued investment into the Western Cape speaks to the confidence they have in our province as a business destination. The expansion of the CTICC is set to double the centre’s existing exhibition capacity. We will see an increase in the number and size of conferences, resulting in more business travellers to our region. Developments, such as the Tsogo Sun’s new hotel, will cater to the Western Cape’s projected increase in business tourism’.

The Trade, Investment, and Tourism agency Wesgro CEO Tim Harris sent out a statement about the Tsogo Sun development too: ‘Our city is re-inventing itself. This R650m investment is a huge confidence booster for the central city and for tourism investment in the region. In addition, because the two hotels are targeting the 2-3 star ‘value tourism’ market they will help to meet some of the excess demand for rooms in this price range and broaden the hotel product offering in the city’.  Tourism in the Cape is positioned for growth. Wesgro calls on all investors in the tourism sector to contact us to discuss business expansion and ‘greenfield’ investments in the city and across the province’.

Carlson Rezidor will open the first Radisson Red hotel to Cape Town, and the first in Africa, Europe, and the Middle East.  It will offer a 24/7 deli, a rooftop pool, and five meeting rooms.  A Radisson Red will open in China too.

Odd is that since the appointment of its new CEO Tim Harris, Wesgro seems to echo Minister Winde in issuing media statements, increasingly appearing to duplicate the excellent PR work of the Minister’s office.  What is a surprise from both parties is that they are welcoming the Tsogo Sun development, yet have not done so regarding the new Radisson Red. If they welcome one business opening, should they not do so about every restaurant, guest house, and other hospitality establishments too?

The more hotel developments that are concentrated in the city centre, the more it will impact accommodation establishments in other suburbs of Cape Town, which have benefited from events at the Cape Town International Convention Centre.  Could this mean that a number of the current 200000 Tourism staff will move from jobs in those suburbs to jobs in the city centre, affecting the Minister’s target of creating another 100000 new jobs in the Tourism sector in next five years?

Chris von Ulmenstein, Whale Cottage Portfolio:  Tel (021) 433-2100, Twitter:@WhaleCottage  Facebook:  click here

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