The V&A Waterfront plans to develop a new mid-market, internationally branded hotel in the forthcoming year, adding to the popular Cape Town-based tourist attraction’s portfolio and leveraging the city’s expected tourism growth.

The Waterfront’s management had yet to confirm a potential operator, after which the project site, timelines and development costs would be outlined.

V&A Waterfront CEO David Green indicated that the new hotel, to be developed among the 123 ha waterfront’s six five-star, two four-star and two three-star hotels, would benefit from the City of Cape Town’s expected tourism growth of between 4% and 5% this year.

“Given the growth in domestic, business and leisure tourism, coupled with consistent growth in the occupancy at our current hotels over the past 18 months, we believe the opportunity exists for a mid-market hotel development,” he said.

Green pointed out that an independent report commissioned by the V&A Waterfront showed that the revenue per available room, or RevPar, of the hotels based at the Waterfront was higher than for those of the surrounding areas, with premiums of up to 52% for five-star, 71% for four-star and 95% for three-star hotels.

“The V&A Waterfront continues to attract a premium in rates and higher-than-average occupancies, and we believe an internationally branded and marketed hotel will … meet the increasing demand for such accommodation.’’

Green noted that a PwC snapshot report highlighted sustained growth in the South African hotel sector’s performance from January to June 2013, with RevPar increasing 13.1% on a national aggregated basis.

Three- and four-star hotels reported growth of 12.4%, while five-star hotels delivered growth of 15.6%.

Cape Town, which welcomed 24-million visitors a year and boasted 24 five-star, 54 four-star and 20 three-star hotels, registered growth of 16.2%.

“The South African hotel industry has come through its worst trading cycle in recent times from the last quarter of 2008 to the third quarter of 2011 and is now beginning to reflect sustainable signs of recovery, with the last three quarters reflecting year-on-year growth,” added Pam Golding Tourism & Hospitality Consulting MD Kamil Abdul-Karrim.