This South African city is expecting a boom in holiday rentals over the festive season

3 years ago 1

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Cape Town and the surrounding coastal towns and villages boast a significant short-term rental market set to boom this summer as local and international visitors return in their thousands.

Experts such as Ross Levin, managing director for Seeff Atlantic Seaboard and City Bowl, expect a massive summer season for Cape Town, with rates and occupancies expected to reach and even exceed pre-Covid levels.

“Following the two-year Covid chaos, there is pent-up demand for travel from both the local and international market,” he said.

Levin added that most establishments are fully booked, saying that short-term rental rates have increased in some instances, especially hotels and high-profile properties located in the most in-demand areas, such as the Atlantic Seaboard.

According to Booking.com, average rental rates in Cape Town range from R1,000 to R3,000 per day. Top-end properties such as apartments close to the beaches range from R3,500 to R5,500 per day, while villas range from around R8,000 to R18,000 per day.

Levin said the short-term rental stock has been quite adequate this year, given the hiatus in the market due to the pandemic, but demand is likely to increase as tourism volumes increase.

“Once we start seeing visitor number growth beyond the pre-Covid levels, renewed investment opportunities can open across the coastal hotspots,” he said.

Coastal Towns such as Hermanus have seen their market bounce back in the last two years, with bookings increasing by some 71.55% in 2021.

This year, normal weekend bookings have doubled while long weekends and school holidays have been fully booked, says Seeff short-term rentals agent Ciska de Vries.

She added that Seeff Hermanus’ short-term rental stock is already booked well in advance for 2023, with guests expected to arrive around mid-December with booked periods ranging from 14 to 21 days.

Short-term rental rates for Hermanus and its surrounds vary greatly depending on the time of year and the property. You could, for example, rent from around R1,000 per day or upwards of R3,750 to R7,750 per night for a top-end home in the Western Cape, de Vries said.

However, according to the minister of tourism Lindiwe Sisulu, these positive tourism prospects are contingent on stabilising vital economic factors, including petrol prices, the power grid, and inflation – as well as the local airline industry ensuring enough capacity to meet demand.

Despite this, given the economic challenges, de Vries says guests are still looking for a good deal or are just booking for shorter periods as their budgets are more restricted.

Sisulu also highlighted that forward bookings for August to January 2023 have increased by 227% compared to last year, pointing to some optimism for the sector.

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