There are only four zoned hotels in Hout Bay: One of them is going under the hammer

Source: Supplied.

Now, one of these four hotels is coming to market, giving would-be hospitality investors the chance to own their slice of the booming Western Cape tourism market.

“This premium boutique hotel, The Berg Manor, located at the exclusive address of 25 Park Avenue, Hout Bay boasts amazing panoramic views of the Orange Kloof Reserve and Twelve Apostle mountain ranges, as well as the Atlantic ocean,” shares Wesley Cowan, managing director of Galetti Auction.

Galetti has been tasked with the sale of The Berg Manor on auction, a sales method that Cowan believes is ideally suited to this turnkey investment opportunity and is set to attract a large pool of hungry bidders from South Africa and abroad.

“It’s not every day that a ready-to-operate luxury hotel in one of the Cape’s most desirable tourist hotspots comes on the market. We anticipate a wealth of bids from investors eager to capture their slice of the lucrative hospitality market come auction day on Thursday, 22 August 2024, at The Capital Hotel in Cape Town.”

The hotel has recently been developed and furnished with brand new, top-of-the-range furniture and the latest amenities, providing the new owner with a seamless start once the transaction is concluded – ideally timed to prepare for the upcoming summer tourist season.

Tourism rebounds post-Covid

The conclusion of the 2023 summer tourist season saw a record-breaking number of international arrivals at Cape Town Airport, surpassing pre-Covid levels in 2019. While the local hospitality industry took a significant knock during the pandemic when international travel was suspended, ongoing recovery is evidenced by a 20% year-on-year increase in visits to key tourism attractions in the province.

“This recovery is especially evident in the accommodation occupancy rates for hotels in Cape Town and surrounds during this period,” Cowan shares. “Global analytics firm CoStar reports that occupancy levels during the first quarter of 2024 reached 73.5% - higher than 2023 levels of 67.1%.”

Source: Supplied.

While the gains made during the recent tourist season are promising, Cowan believes that demand for well-placed accommodation in the area extends year-round, given the uptick in digital nomads, local tourism and the ongoing semigration trend seeing more South Africans relocating to the Western Cape.

“Heightened demand has seen even the most ordinary hotels in Cape Town emboldened to raise their daily room rates, at an average of 37% according to CoStar.

"A well-located and unique offering like The Berg Manor is perfectly poised to capitalise on this demand and we are expecting a wide range of competitive bids from both local and foreign hospitality investors and hoteliers who are looking to add something unique to their portfolio.”

Boutique hospitality dream

As one of only four hotels in Hout Bay, The Berg Manor represents a bespoke hospitality experience - designed to be remembered long after check-out – in a highly sought-out and picturesque location.

With rooming options ranging from five spacious luxury en-suite suites in the main manor, four two-bedroom and one one-bedroom self-contained villas, as well as a romantic tree cottage, the hotel is ideal for investors looking to establish or expand their portfolio in the boutique hotel industry.

Additional amenities include a professional kitchen and reception area in the Main Manor, multiple swimming pools, two restaurants, conference facilities and spa services, all nestled in lushly landscaped gardens.

Source: Supplied.

Cowan believes that the hotel’s smaller size, spanning 2,162m², offers a definite advantage for hospitality investors seeking a foothold in Cape Town’s vibrant tourism market.

“A boutique hotel investment is advantageous as it unlocks the twin benefits of lowering running costs, and a greater degree of control over staff interactions and the entire experience,” comments Cowan.

“The focus shifts from a pleasant but generic experience as may be experienced in hotel chains to one of exclusivity and a personalised approach, offering unique and intimate spaces and interiors.”

Cowan shares that prospective bidders can further benefit from attractive market conditions, with the Western Cape having consistently shown high returns for this industry year-after-year. “Furthermore, Hout Bay is still ripe for capitalisation as it is by no means an over-saturated market when it comes to hotels.”

He concludes, saying that in the hands of the right owner, “The hotel is ideally positioned to compete with renowned nearby hotels like Tintswalo Atlantic and the Twelve Apostles, especially considering the lack of well-appointed conferencing facilities in the area.”