International hospitality groups are turning their attention to South Africa once more after keeping their distance for much of the past decade, with two recent investments signalling a vote of confidence in the country.
Last month Club Med held the global inauguration of its KwaZulu-Natal north coast resort, celebrating the brand’s first foray into the country. That same week, Singapore-listed Banyan Group announced it will buy a 70% stake in Cape Town-based Newmark Hotels & Reserves.
Wayne Godwin, head of real estate service provider Broll’s hospitality business, views this dealmaking as a return to form. Before 2015, foreign buyers were snapping up lodges and resort assets, but since then and until a couple of years ago this had dropped off, he says. “I think it had a lot to do with the political noise in the system over that period.”
Deals of this kind have been thin on the ground for a decade. Now interest has revived to a degree, he says, with the Banyan-Newmark purchase being the clearest signal of the shift.
The deal will see Banyan paying about R533m in cash for its 70% stake in Newmark (valued at about R756m), with the possibility of full ownership. Factoring in Newmark’s 26 hotels, lodges and reserves in seven countries, it lifts Banyan’s global footprint to nearly 130 properties in 28 countries.
Independent travel expert Gillian Saunders calls it a very good brand match. “Together, the two of them are effectively staking a claim: Banyan says it believes in the future of tourism and hospitality in South Africa and on the African continent, and I think it did want its footprint outside South Africa too.”
Newmark’s soft-brand structure helps, says Saunders, as the individual properties carry their own names, so there will be no branding confusion.
As part of the deal, Newmark will retain its leadership, teams and local operating approach, joining Banyan Group as a collection brand while gaining access to its wider international distribution, development and commercial capabilities. It brings the cachet of an international name renowned for small boutique hotels, sustainability and exclusive experiences in wilderness areas and other special sites.
A R2bn yes vote
While the Banyan deal is a real equity investment, with an investor buying an existing operating platform, most major international groups in South Africa operate a model in which the property is owned by an independent investor or developer rather than the brand itself. The owner pays to use the brand and, depending on the agreement, appoints the group to manage the hotel under a management contract.
Examples include Hilton’s DoubleTree by Hilton Cape Town and IHG Hotels & Resorts’ rebranding of the Table Bay as the InterContinental Table Bay Cape Town. The opening of Morea House in Camps Bay marked Autograph Collection’s debut in Cape Town, expanding Marriott International’s portfolio of independently minded hotels in South Africa.
And there’s more to come. Marriott’s Edition hotel at the V&A Waterfront, a 142-room luxury property, is due to open later this year. In addition to Morea House, Marriott is likely to open a Moxy in Green Point. Accor’s 127-room Mama Shelter on Bree Street also opens in a month or so. And Four Seasons has plans for further expansion in South Africa.
Club Med, meanwhile, has been built from scratch and is owned and developed by Tinley Leisure, whose shareholders include African Bank, the Industrial Development Corp and investors represented by Trevally and Tinley Leisure Women Investments.
This deal has been several years in the making and is worth more than R2bn, which makes it South Africa’s largest hotel investment since Sun City several decades ago. It is “a vote of confidence in South African enterprise”, tourism minister Patricia de Lille said at the global launch on behalf of President Cyril Ramaphosa.
According to Tinley Leisure chair Moses Tembe, KZN is on its way to becoming an engine of economic growth. “The opportunities extend beyond tourism to oil and gas, power generation and manufacturing — and strategically, our location, our ports and our road infrastructure position us as a gateway to Southern Africa,” he said at the launch.
It’s certainly a gateway for Club Med. Edward Xu Xiaoliang, co-CEO of Fosun International — the Chinese investment and consumer group that bought out Club Med in 2015 — says entering South Africa and Sub-Saharan Africa is an important step for the group, which is aiming for about 85 resorts worldwide by 2030.
“[Elsewhere] in Africa, we hope to build more landmark resorts like this one, delivering both economic and social benefits alongside good revenue and a good reputation,” he said.
The continent is attracting more international tourists, and global hotel groups are expanding on it because they see long-term growth opportunities in both leisure and business travel.
Godwin, for his part, sees Banyan’s deal as a possible stepping stone into the continent.
“It’s very hard to come into other African markets if you don’t have any assets or aren’t managing them,” he says, explaining that many international groups would “rather invest into that South African platform and maybe use it as a vehicle to grow [further] into Africa”.
Local growth
When it comes to the broader hospitality outlook in South Africa, Saunders is upbeat. “Everything is looking strong for [South Africa] in terms of tourism growth at the moment.”
Despite macroeconomic and geopolitical headwinds, long-haul inbound travel remains relatively robust. South Africa welcomed 6.5-million international visitors between January and July, up 12.4% on the same period in 2025.
With that uptick in interest, global operators and investors are taking a sharper look at South Africa “and Cape Town is leading that”, says Lee-Anne Singer, Cape chair of the Federated Hospitality Association of Southern Africa and Southern Africa partner of hospitality consultancy HVS. The fundamentals are improving, she explains: more stable electricity, a more predictable policy environment, visa reforms and better air access. “Add the fact that Cape Town is now one of the fastest-growing hotel rate markets in the world, and investors take notice.”
Rising room rates help to explain the growing interest of international hotel groups in the city. Data from hospitality analytics company STR shows occupancy at 65.3% in the 12 months to July, with average daily rates up 11.3% to $195. South African luxury rates have climbed 121% in rand terms since July 2022 and are up about 14% year to date.
Cape Town is now among the world’s leading markets for average daily rate growth, strengthening the case for global brands seeking a foothold in the premium end of African hospitality.
There is a catch, though: that growth is coming almost entirely from price, not from more guests. “Occupancy in Cape Town is actually slightly down year to date,” Singer says. “Cape Town is becoming noticeably more expensive for visitors, and we need to watch affordability carefully so we don’t price ourselves out of key markets.”
Still, the long-term outlook holds, says Singer, and South Africa is considered a growth market. What that means for further investment remains to be seen. As Godwin says: “It’s great to celebrate Club Med, but how do we actually get the next 10, 12 [establishments] on that coast?”
