from DION HENRICK in Cape Town
Western Cape Bureau
CAPE TOWN, (CAJ News) – SOUTH Africa’s hospitality industry is under mounting pressure as staffing shortages, rising operating costs and weak institutional support threaten to slow its post-pandemic recovery, according to a new industry report released on Monday.
The inaugural Hospitality Asset Management Company (HAMAC) South African Hoteliers Report, compiled in association with Tourism Update, paints a sobering picture of a sector caught between renewed demand and deep-rooted structural challenges.
Based on a nationwide survey of hospitality executives and managers, the report reveals that 77% of hoteliers struggle to recruit and retain staff, identifying human capital as one of the most significant threats to long-term sustainability.
Despite improved travel demand since COVID-19, 58% of respondents report that profitability has either stagnated or declined over the past five years, underscoring the gap between recovery on paper and the realities on the ground.
Rising costs, infrastructure failures and regulatory complexity continue to erode already-thin margins.
Skills shortages extend beyond headcount.
Nearly 70% of respondents expressed dissatisfaction with the competency levels of newly recruited graduates, raising concerns about the future readiness of the hospitality workforce.
This skills gap is compounded by high stress levels among management, with 42% reporting weekly or daily stress symptoms that impair decision-making.
Cost pressures remain severe.
Labour costs were cited as the leading driver by 37% of respondents, followed by utilities — particularly electricity — at 34%, and food costs at 29%.
Almost 30% identified red tape as a material operational constraint, limiting agility and adding administrative burden.
As a result, 54% of hoteliers have deferred essential capital upgrades due to funding constraints, freezing growth and undermining competitiveness.
However, the report highlights cautious optimism.
Nearly 46% of respondents said they would prioritise investment in people if infrastructure challenges such as electricity and water were resolved.
Technology is also emerging as a key lever for recovery, with 77% actively exploring digital solutions to streamline operations, automate processes and improve efficiency — though 76% still lack a formal AI strategy.
The findings also point to an erosion of trust in industry institutions.
Seventy percent of respondents reported limited confidence in SA Tourism and the Tourism Grading Council of South Africa (TGCSA), while sentiment toward the Federated Hospitality Association of South Africa (FEDHASA) was evenly divided.
“The findings confirm what many hoteliers experience daily: recovery on paper is not the same as recovery in practice,” said Anton Gillis, CEO of HAMAC.
“The challenges facing the sector are largely systemic rather than strategic.”
For the hospitality industry to recover sustainably, the report argues that coordinated action is essential. Reliable infrastructure, streamlined regulation, targeted funding mechanisms, skills development and stronger collaboration between government and industry bodies are critical.
Treating hospitality as strategic economic infrastructure, Gillis added, would unlock its potential to create jobs, drive regional development and support local economies.
The report concludes that while South Africa remains a world-class destination, the sector’s ability to deliver on that promise will depend on decisive, collective intervention.
– CAJ News