Cape Town Hotels Split Over Rise Of Airbnb-Style Aparthotels

Cape Town’s tourism scene is buzzing again, but behind the scenes, a fight is brewing. The city’s traditional hotel operators say they are struggling to keep up with the surge of short-term rentals and aparthotels that have flooded the market. Others, however, see this as a natural evolution of travel one that caters to the changing needs of visitors.

Hotels Say They’re Playing By Different Rules

Anton Gillis, CEO of Hamac Asset Management, sparked debate after warning that Cape Town’s hospitality sector is “bleeding”. Despite STR CoStar data showing healthy occupancy rates of around 72.5% in April and 68.2% over the first half of the year well above the national average Gillis says many hotels are trading at low rates while aparthotels enjoy fewer costs and looser regulations.

“Hotels and aparthotels cater to the same guest, at the same price range, but when it comes to compliance, it’s a different story,” he argued. “Hotels are investing in jobs, training, safety and sustainability. We don’t get to cut corners, and we don’t want to.”

The frustration is not just about competition, but about fairness. Traditional hotels say they carry the weight of regulations, levies and community investment, while newer operators don’t always do the same.

Aparthotels Claim To Meet Modern Traveller Demand

On the other side, aparthotel operators say they are filling a real gap in the market. Joep Schoof, COO for Valor Hospitality Partners Africa, believes this isn’t a zero-sum game. “Aparthotels meet the needs of guests who want flexibility and a ‘home-away-from-home’ experience,” he explained. “From business travellers and digital nomads to medical tourists and families, the demand is genuine.”

Rael Phillips, CEO of Totalstay, which runs several aparthotels in Cape Town, echoed that view. He insists his business also invests in jobs and sustainability: “Short-term rental regulation will come, and I hope it’s fair. At the end of the day, we all support the tourism economy.”

A City Booming With Developments

Cape Town’s skyline tells its own story. More than 40 new hotels are in the pipeline, alongside the rise of aparthotel brands like Totalstay and Charles Hope. Big refurbishments are also underway, including the Table Bay Hotel and the new Quay 7 at the V&A Waterfront.

But BON Hotels founder Guy Stehlik warns of a déjà vu moment. He recalls the late 1990s when Cape Town geared up for a possible Olympics bid, only to be left with too many hotels and not enough demand after Athens was chosen. “Oversupply dragged on occupancy rates for years,” he cautioned.

Will Regulation Level The Playing Field?

Tourism Minister Patricia de Lille has promised that new rules for short-term rentals will form part of the long-delayed Tourism Amendment Bill. But with no clear timeline, the uncertainty is fuelling tension.

On social media, the reactions have been split. Some users argue that aparthotels make Cape Town more accessible, especially for families and long stays, while others sympathise with hoteliers who say they’re losing out despite carrying the heavier regulatory burden.

What’s At Stake

The future of Cape Town’s hospitality sector may hinge on how well it balances innovation with regulation. While travellers enjoy more choice than ever, the risk of oversupply and uneven competition remains. As the city positions itself as a global tourism hub, the question is whether its industry can grow sustainably or whether history could repeat itself.

{Source:Tourism Update}

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