"The stability and maturing of our economy has resulted in a marked increase in overseas investor confidence in regard to the hospitality industry. This has resulted in South Africa becoming one of the preferred destinations for international hotel operators and foreign investors in the industry, a trend which we anticipate will prevail for years to come.

"While the latest statistics from the Deloitte Hotel Benchmark Survey reflect this slight slowdown in growth of revenues, the overall picture is still positive, compared to a major competitor such as Australia - a country with a similar climate and which is geographically also a fair distance from Europe and America. While there's a slight shift among visitors moving from 5 star to 4 star, and from 4 star to 3 star accommodation, this doesn't necessarily mean less visitors - just that they are being financially more conservative in which option they choose," he says.

Demes says that coupled to the current upbeat status quo is the tremendous boost that the Soccer World Cup 2010 will give to the hospitality industry. "This major event is not to be underestimated in terms of the huge exposure it means for South Africa. If you track what occurred at other venues which have hosted this event it is apparent that the country and its key cities receives a massive increase in exposure not just during the event itself, but for many years in the build-up to it, and beyond.

"A mini-World Cup involving approximately 16 teams is staged as a pre-tournament several years in advance, bringing accompanying supporters and the media, and so we can start anticipating concerted growth in our foreign tourist arrivals over the next several years, coupled with greatly increased media exposure. Despite the strong rand, visitors who come out here are still extremely impressed at not only the vast scenic beauty of South Africa but at its infrastructure, its variety, and its diversity of people and cultures. We are still a relatively undiscovered destination, and the increased flow in visitors as a result of the Soccer World Cup will undoubtedly result in sustainable growth for some time after the event as well."

Demes says that these opportunities have not gone unnoticed by key players in the overseas hospitality industry, a fact which is born out by a number of recent and current transactions. A major international hotel group, which is currently targeting South Africa - and Cape Town in particular - has accepted to undertake a major lease in the Mother City for a 150 bedroom 5 star hotel. This is the second major traditional lease facilitated by Demes in South Africa during the last 12 months involving a major international hotel group.

He highlights that this is totally against the trend in the global hotel industry, and explains that there has been a serious decline worldwide in revenues in hotels, which has led to a number of liquidations and takeovers.
"Operators are hesitant to sign deals where a fixed amount of rental is payable on an annual basis, and now often elect for turnover related leases. Traditional leases in South Africa, due to a relatively high inflation rate, still command high annual escalation rates compared to leases in Europe, Australia, Asia and America. This recent lease indeed underlines the tremendous confidence of major global hotel operators in the SA hospitality industry and its sustainability into the future," adds Demes.

In addition to facilitating this major lease, Golding Hotel Investment Consultants have also just facilitated a joint venture between a number of Irish private investors and one of the larger and most successful 4 star hotels in Cape Town. Demes notes that GHIC is also working on two further major hotel projects in the Cape Town area on behalf of both local and international investors.