Kwazulu-Natal Business News

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PROPERTY: KZN Guesthouse Market Boosted By New Airport


Recent Kwazulu-Natal Business News

Now that the King Shaka International Airport at La Mercy, north of Durban, has bedded down, it’s already become evident that the KwaZulu-Natal north coast hospitality market is benefiting from the close proximity of the new airport, coupled with the favourable publicity this region received during the recent Soccer World Cup, report Corinne Lategan and Ian Bannerman, local consultants for Pam Golding Lodges and Guesthouses (PGLAG).

“Hospitality businesses in the areas of Durban North, Umhlanga, Ballito, Salt Rock and Blythdale – all within 15 minutes of the airport, are already experiencing positive impact, with guesthouses reporting record growth in demand in both the corporate and leisure markets,” says Lategan. “For the first time we have international carriers such as Emirates, Air Mauritius and Air Maputo arriving in Durban, and these will be expanded in due course.“

She says since the development of the La Lucia and Umhlanga Ridge Office Parks, the areas of Durban North and Umhlanga have been popular with both the corporate and leisure markets. “Further to this, operators we have spoken to in the area are now recording occupancy levels of above 80 percent due to the fact that they are now also capturing the market of travellers who want to be based near the airport – irrespective of where their business activities are situated.”

Comments Bannerman: “Ballito, Umdloti and Salt Rock are seeing a steady influx of corporate travellers, a factor which is rapidly changing the profile of the hospitality industry in these areas – and within the guesthouse market benefiting mainly 4- and 5-Star establishments. Whereas previously, many businesses were primarily focused on the leisure industry, they are now cashing in on the corporate demand brought about by the double impact of the new airport and the trade and business park developments taking place in Ballito and surrounds. This will of course be compounded when the Dube TradePort is fully operational. Even the game lodges further north are benefiting from the fact that they are now more than one hour closer to the airport than before. A tourist can be in a game park within one-and-a-half hours of arriving at King Shaka International Airport. This makes King Shaka the closest major international airport to a national Big 5 game reserve in South Africa.”

As a result of these positive spin-offs PGLAG is seeing increased interest in guesthouses and recently concluded the sale of an Umhlanga 4-Star guesthouse with seven guest suites plus a two bedroom, owner’s apartment, as well as a 3-Star establishment in Durban North with seven guest suites and an owner’s suite – both sold to local buyers.

Peter Bruil, MD of PGLAG, which has its headquarters in the Cape, sees an overall increase in hospitality properties in South Africa. “November (2010) was a record month for 4- and 5-Star establishments, and brought to our shores many overseas visitors who now see an opportunity to leave behind the economic woes being experienced in Europe and to possibly invest in the hospitality market in South Africa - and become part of our growing economy.”

Having opened in May 2010, just prior to the start of the Soccer World Cup, the new King Shaka International Airport – which is a component of the Dube TradePort, is expected to be a catalyst for significant economic growth and development in the region, including the creation of sustainable employment opportunities. Its strategic positioning, coupled with its easy access to the major harbours in Durban and Richards Bay, provide a gateway for trade into the South African hinterland and sub-Saharan Africa, as well as elsewhere in the world.

Says Lategan: “One of the components of the Dube TradePort which we anticipate will have a significant positive impact on the hospitality market in this area is the support zone, which will see a number of nodes developed, and which will provide a secure, world-class, 24-hour business and trade environment. This will incorporate business parks and offices hotels and specialist conference and meeting facilities, supporting retail facilities and international trade centres spread over 12 hectares in the first phase alone. The other components of the port include a trade zone, linked to the airfreight handling component of the airport, an integrated agricultural export zone, and a cyber port – to satisfy the need for highly effective technology for national and international trade communications.”

Adds Bannerman: “Once the port is fully functional, a unique business hub will exist which will have a domino effect on all subsidiary service related businesses not the least of which will be the hospitality industry. The demand for accommodation close to a hub of this size and with such diverse business interests – many of which will have global reach – will create a very good return on investment for hospitality business owners,” he says.


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