by Lee-Anne Singer, FEDHASA Cape Chairperson
What were the most defining challenges and breakthroughs for the hospitality sector this past year?
For me, the standout breakthrough of 2025 was watching years of hard, persistent advocacy finally turn into real wins. These weren’t symbolic — they changed the operating environment for businesses on the ground.
The withdrawal of the Bargaining Council extension is a major one. Removing those blanket rules gives non-party businesses a fighting chance again. The approval of 20-year leases for coastal properties in KZN is another big victory — that kind of certainty is what unlocks investment and jobs.
The challenge? Our dual-track economy is becoming more pronounced. Cape Town is flying; international spend is strong, and demand is consistent. But many domestic-reliant businesses in other provinces are under real pressure. When municipal services collapse, that divide widens. You cannot run a hotel or restaurant without water, electricity, and basic infrastructure — it’s that simple.
How would you characterise the pace and shape of recovery across different segments?
Recovery is uneven — truly K-shaped.
International leisure, especially in the Western Cape at the higher end of the market, is performing exceptionally well. Spend is high, length of stay is healthy, and the confidence is real. The MICE sector is also bouncing back nicely, buoyed by major global events choosing South Africa again.
But domestic leisure and corporate travel are still soft. We see spikes around big events, but overall, South Africans are cautious, and disposable income remains tight. Relying on one market is no longer a sustainable strategy — diversification is the only way forward.
What role did domestic travel play in sustaining the industry this year?
Domestic travel was the stabiliser. It didn’t drive growth this year, but it kept many businesses afloat during the quieter months. The reality is that locals want to travel — but their wallets say otherwise. The sector’s domestic performance is ultimately tied to the health of the wider economy. When the economy struggles, so does the everyday traveller.
How have occupancy, ADR and RevPAR trended compared to pre-pandemic benchmarks?
We’re effectively observing two different industries in one country.Destinations with strong international appeal, particularly Cape Town, are outperforming 2019 on ADR and RevPAR. That demand gives operators room to reinvest and upgrade.
Elsewhere, the story is completely different. In provinces that rely heavily on domestic and corporate markets, occupancies and rates are under pressure — and in some cases slipping backwards. It’s a warning sign. It’s also why regional destination marketing and municipal support matter so much. Growth shouldn’t be confined to one or two cities.
What are your top strategic priorities for the year ahead?
Three clear priorities:
• Fixing the operating environment
We’ll keep pushing to reduce unnecessary red tape. The win on Bargaining Council was significant — now we build on it. Liquor licensing reform, local bylaws, and other constraints on SMEs remain serious obstacles.
• Developing talent and rebuilding the pipeline
Skills shortages are our biggest long-term threat. We’re strengthening our work with Future Leaders Challenge, universities, and the Department of Tourism’s graduate placement programme. Growing talent is non-negotiable.
• Securing reliable infrastructure and service delivery
We will keep engaging municipalities and government departments — water, electricity, and basic services aren’t “nice to have.” They’re the backbone of every hospitality business in South Africa.
Which guest preferences are here to stay, and which will fade?
Here to stay:
Authenticity, sustainability, and a seamless digital experience. Guests want to feel connected to the destination and expect technology to make their stay frictionless.
Fading fast:
Anything generic. Businesses with no story, no identity, and no attempt at meaningful community connection are losing favour. Your brand, your partnerships, and your digital touchpoints are now as important as your physical property.
What technologies or tools are proving most transformative?
The tools making the biggest difference are the ones that help operators work smarter, not harder:
• AI revenue and communication tools that support pricing decisions and personalise guest communication at scale.
• Integrated PMS systems that finally give operators a full view of their guest journey.
• Smart energy and water systems that help businesses control costs — crucial in South Africa where utilities are unpredictable.
Technology isn’t a “nice add-on” anymore. It’s survival.
How are you engaging communities or contributing to inclusive economic growth?
Our approach is practical and focused on real outcomes.
We placed 250 youth trainees with members in partnership with the Johannesburg Tourism Company, and we continue driving uptake of the Department of Tourism’s graduate placement programme.
In the Western Cape, our Skills Development Fund with Bestinvestin is giving SMMEs in indigenous communities real support and access to opportunities. These aren’t tick-box initiatives — they’re building blocks for genuine inclusion and long-term growth.
What advice would you give emerging professionals entering the industry in 2026?
Stay curious. Learn everything — not just your department.
Understand AI, digital marketing, compliance, and finance. Build your network early and use FEDHASA Young Professionals to connect with people who’ve built long, resilient careers.
Hospitality is not easy, but it is one of the most rewarding industries if you stay committed to learning and service. Your growth is your responsibility — and your relationships will shape your future.
Tackling the Challenges Facing the 2026 Hospitality Industry
What major shifts do you expect to define 2026?
Three big shifts:
• A deeper split between high-yield international markets and value-driven domestic markets.
• Technology moving from front-of-house features to serious operational infrastructure.
• A workforce shift from recruitment to retention and upskilling.
Operators who understand how these three elements connect will lead the pack.
How do you see global economic trends influencing demand next year?
The weak rand works in our favour for inbound travel. South Africa remains exceptional value for international tourists. But the same weak rand pushes up costs for operators — equipment, supplies, imported goods. Corporate travel budgets globally are also tightening.
The message is simple:
Market aggressively for value, but plan carefully for rising input costs.
Are there emerging guest preferences hotels and restaurants should prepare for?
Absolutely — and they’re clear:
• Hyper-niche, outcome-driven travel (wellness, nature, culinary, creative retreats).
• Long-stay and work-from-anywhere travellers needing flexibility and connectivity.
• A demand for transparent sustainability practices — no greenwashing.
Generic hospitality is becoming irrelevant.
What do you see as the biggest workforce challenges in 2026?
We’re facing a complex talent crisis. The passion pipeline has thinned; graduates aren’t work-ready; and other sectors are offering more attractive pay and hours.
We’re competing for talent — but we’re also competing for perception.
If young people don’t see hospitality as a long-term career, the whole industry suffers. This is why our partnerships with universities, placement programmes, and mentorship initiatives matter. We’re rebuilding belief in hospitality as a profession.
What does “luxury” mean in 2026 and how is it shifting?
Luxury is no longer about excess — it’s about access.
Privacy, exclusivity, and curated experiences are what define luxury now. The best operators are investing in exceptional people and smart technology that anticipates needs quietly. Loyalty, not opulence, is the new metric.
What recent-crisis lessons should guide planning for 2026?
The key lesson is that resilience must be built into the business model.
Revenue streams must be diversified, cash reserves must be prioritised, and supply chains need to be local where possible. Volatility is the norm — not the exception.
Where do you see the biggest opportunities and risks?
Opportunities:
Turning policy wins into actual commercial growth. Visa reforms — including the new ETA with China, India, Indonesia, Mexico, and the STAGES/MEETS visas — open high-value segments like film and MICE.
Regional tourism development is another untapped area. Not every visitor wants a city break — and that’s a huge opportunity for South Africa.
Risks:
Domestic constraints remain our biggest threat:
• a struggling local economy,
• overwhelming regulatory barriers, and
• unreliable basic services.
These are the issues that directly impact viability — and why advocacy is not optional. It’s essential.
