Nikki Forster, PwC leader of hospitality and gaming, says the intense competition saw some hotels at the upper end lowering prices to the extent that they were competing in the star segment grading below theirs, putting pressure on all the star segments.
Such competition was more prevalent in the five-star market, although it was not across the board.
Danny Bryer, director of sales, marketing and revenue for the Protea Hospitality Group, says the opportunity to price correctly has now materialised. Prices should start falling into line with star gradings, he says.
Statistics from STR Global indicate that occupancy levels in five star hotels in South Africa have improved from 57,2% to 61,9% in the first six months of this year, compared to the same period last year.
Average room rates in the same segment have increased by 8% to R1 706,55 during the same period.
PwC data says there were about 60 400 rooms available in the hotel industry last year.
Bryer says there is still an opportunity for new hotels in the Sandton area and where new mining developments will occur.
The meetings, incentives, conferences and exhibitions market is expected to continue growing, with the National Convention Bureau having secured 88 bids up to 2017. The National Department of Tourism, estimates these events will attract about 200 000 delegates and R2.6billion to the tourism economy.