Short-term rentals – like Airbnb – soar in SA as tourism bounces back

Business Insider SA
(Photo by Jakub Porzycki/NurPhoto via Getty Images)
(Photo by Jakub Porzycki/NurPhoto via Getty Images)
  • South Africa's embattled tourism sector is recovering, but overseas arrivals are still a long way off pre-pandemic levels.
  • As hotel occupancy levels edge their way towards the 40%-mark, short-term rentals, arguably saved from the worst of the pandemic, have been quick to bounce back.
  • Occupancy levels in short-term rentals, like Airbnb, are up to nearly 75%, according to the country's largest property manager.
  • Average daily rates have also increased by 31% over the past year.
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South Africa's tourism sector is slowly recovering from the pandemic-induced downturn, with short-term rentals, like Airbnb, benefiting from the return of foreign visitors and local travellers who prefer self-catering accommodation.

After two years of global travel restrictions, flight suspensions, border closures, and stringent quarantine requirements – many of these focused on South Africa due to the country's scientific prowess in detecting new Covid-19 variants – international tourism is bouncing back.

This bounce-back has been stronger in some regions, like Europe, where holidaymakers' pent-up demand, coupled with the aviation sector's lockdown hangover, has led to chaos at airports.

See also | Airbnb wants to take six travellers on a 19-day train tour across Europe – How to apply

South Africa's recovery hasn't been as swift. The country welcomed more than 267,000 overseas visitors in the first quarter of 2022, up 45% from the previous quarter and a massive 537% compared to the first three months of 2021.

Although these arrival numbers show that South Africa's embattled tourism sector is on the right track, the road to a full recovery, to pre-pandemic levels, is still a long way off. South Africa has only welcomed 37% of overseas arrivals recorded in the first quarter of 2019.

Hotel occupancy levels in South Africa increased to more than 38% in May – the highest levels recorded this year – according to Stats SA's seasonally adjusted tourist accommodation statistics. In 2019, this occupancy rate was closer to 50%.

But one type of holiday accommodation in South Africa appears to be outpacing the rest, according to the country's largest short-term rental management company.

"Our total property count has doubled over the last year, which speaks to the recovery in the space and the move from long-term back to short-term rentals. Average daily rates are higher than what they were pre-Covid," said Chregan O'Flynn, the co-founder and managing director of Propr, which manages properties listed on Airbnb, Marriott's Homes & Villas division, and two aparthotels.

Between October 2021 and May 2022, a period which witnessed travel disruption due to the discovery of the Omicron variant, Propr's gross bookings grew by 266%, and total revenue was up by 234% compared to the previous season.

Occupancy rates also increased to 74.43%, up from 63.28% the year prior, according to O'Flynn. This rise in demand also correlates to rising prices, with O'Flynn highlighting that the average daily rate had increased by 31%.

The average length of a stay at a short-term rental property has also dropped from its lockdown highs.

"Average stay length has also gone from 5.47 days pre-Covid to 7.58 days in 2020/2021 to 6.4 days during this last season. So, we are seeing shorter stays again, which corresponds with the return of international travel," explained O'Flynn.

"When Covid hit, the drop in international travel coincided with an increase in the length of stays as a result of more South Africans working remotely."

O'Flynn credits the short-term rental market's recovery to the agility of property owners who've started to accept later same-day bookings and one-night stays. Previously, short-term rental owners would generally require "a minimum stay of three days or more to maximise earnings," said O'Flynn.

But the popularity of short-term rentals and self-catering accommodation can also be attributed to preferences changed by the pandemic.

"Hotel rooms can also become quite monotonous and tiring after a while as they are small and pretty uniform," explained O'Flynn.

"Airbnb offers quirks, uniqueness, and interesting styles which most hotel rooms don't, and short-term rental accommodation generally provides more facilities/amenities too, such as washing machines, fully equipped kitchens, storage space, and coffee machines. This has been especially true during the pandemic, which saw many hotels close down their value-added facilities like spas and restaurants."

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