Hotels feel the lockdown pinch

Harbour Arch is still going ahead and phase 1 is expected to be complete in three years.

The coronavirus lockdown has crippled tourism across the country and left most of the CBD’s 40-odd hotels closed since March.

While some hotels have reopened their restaurant areas, most only have skeleton staff on duty. 

According to a report by the Cape Town Central Improvement District (CCID), performance of hotels in the CCID footprint remained stagnant in 2019 at an estimated occupancy of 67%. 

Over 980 rooms entered this node alone between 2017 and the end of 2019, and an additional 400 rooms entered the market at the V&A Waterfront and its surrounds. 

The recovery continued into 2020 with positive upticks in occupancy in January and February. However, from March, the impact of the virus saw a massive decline.

According to travel agency Adara, the global hotel industry lost approximately 75% of its bookings by week 12 of 2020, in comparison to the same period in 2019.

Last week, Millat Properties announced that the Hilton Hotel in Buitengracht Street will no longer be managed by the Hilton hotel group.

In a statement, Millat Properties said it was disappointing that the relationship with Hilton has come to an end, especially during the Covid-19 pandemic, when South Africa’s primary tourist destinations and its people most need support.

Millat intends using this time as an opportunity to revitalise the hotel’s offering, including redesigning rooms.

“We are proud of the exemplary hospitality the property has delivered under our management and would like to thank all of those who have contributed to this over the last nine years.   

“We remain committed to Cape Town as a destination and continue to welcome guests at DoubleTree by Hilton Cape Town Upper Eastside. The city will also be the location for Africa’s first Canopy by Hilton hotel named Canopy by Hilton Cape Town Longkloof, which is currently scheduled to open towards the end of 2021.”

Meanwhile, building activity has resumed at Harbour Arch, which, once complete, will arguably be the biggest development at the Foreshore. 

Due to the lockdown, the construction industry had to cease all building work. 

James Wilson, CEO of the Amdec Group, the developers of Harbour Arch, said the first tower includes 432 residential apartments and approximately 7 000 square meters of retail and office space. Harbour Arch Tower One is now under construction and it is anticipated to be complete within three years. 

The entire Harbour Arch development of six individual towers is expected to be completed within 10 years.

Mr Wilson said like all major businesses worldwide, Amdec have taken a large financial knock due to the Covid-19 pandemic, and had to temporarily close all five hotels nationwide.

“Many of our retailers and particularly our restaurants have been unable to trade throughout this pandemic. The Amdec Group, has committed itself to assisting our tenants financially until such time as normality returns to business and society can begin to function as it did prior to this pandemic.”

AC Hotel by Marriott at the Yacht Club in the Cape Town Waterfront, has elected to remain closed for the time being.

“The South African economy is in an extremely fragile position, with unsustainable unemployment, hugely reduced GDP, national government budget deficits and much more negative news. It sometimes feels that all the doom and gloom is never ending.  However, South Africans are resilient people and as a nation we need to pick ourselves up and move forward positively. It is very important for our collective national confidence that large scale businesses and in particular real estate developers commit to new large scale investments and lead the way to a better future.”

He said Harbour Arch will create approximately 20 000 jobs in the construction industry alone. Post construction many thousands of jobs will be created by large scale employers such as hotels, retailers and restaurants.

Table Bay Hotel in the Waterfront has also opted to remain closed, but general manager Joanne Selby believes there is light at the end of the tunnel, as South Africans are resilient. 

“It was tough. We miss our guests and the people. The hotel was striving. We went from hero to zero in no time.”

She said 80% of the Table Bay’s guests are international, and while the borders remain closed, the hotel will remain closed. 

“The hardest part is the uncertainty, and it takes a different kind of motivation to stay positive, but we have to think we are the generation that made it through the coronavirus pandemic.” 

The CCID said other hotels that are still going ahead with development are the Hotel Sky on Lower Long street, and 84 Harrington St, which is a mixed-use development that includes hotel accommodation. 

Urban Chic Hotel in Long Street has also closed down, but, according to the CCID, it is highly unlikely that it was due to the lockdown.