Cape Town luxury hotel rates almost triple Sandton rates as demand soars

Luxury hotel rates in Cape Town are on average almost three times higher than in Sandton ahead of an expected bumper tourist season for the Mother City.

Cape Town’s five-star hotel rates were also on average double the rates achieved in KwaZulu-Natal in the period January to September 2025, according to Lee-Anne Bac, Partner, Strategic Development and Advisory, BDO South Africa.  

The trend looks set to continue into the new year, with all indications pointing towards visitor growth. “This current tourism season is looking particularly positive for international tourism arrivals,” said Bac, who provides specialist advise on the tourism and hospitality sector to both public and private sector clients.  

“This will be supported by demand from the domestic market – particularly from md-December to mid-January.  We are anticipating that the Western Cape is going to be bustling, which bodes well for hotels, self-catering/ short-stay rentals, retail outlets, restaurants, attractions, and of course transport providers.”

Average rates in Cape Town for 4- and 5-star hotels are around 19% higher than in 2024, while 3-Star hotels rates are around 5% up on 2024, Bac said.  

Overall international tourism numbers are 18% up on 2024 numbers, and 2% up on the same period in 2019. “However, in reality these figures are driven by strong demand from African visitors,” Bac said. “Overseas visitors are up 18% on 2024, but are still 9% behind the same period in 2019 – so yet to return to the heydays.”  

Industry stakeholders singled out the US market as showing significant growth. There was also a noticeable uptick in visitor numbers from China and India, possibly as a result of a Tour Operator Programme launched by the Department of Home Affairs.

“Visitors from our historically strong markets like the UK and the US feel comfortable coming here but  the growth opportunities are in other markets, particularly the Middle East which has really picked up since Covid,” said one well-placed source. “Developing that market should be a big opportunity.”

Year to date (Jan to Oct 2025) Overseas Air arrivals at Cape Town International Airport also bode well for a bumper tourist season. Figures are 23% up on 2019 levels (and 22% up on last year).

The Ocean Sailing Association of Southern Africa has also reported an increase in the number of cruising yachts visiting this season, with berthing in short supply, particularly in Cape Town.