Cape Town, one of the World’s Most Affordable Destinations

A survey carried out by International survey publishers Mercer.com is reported by the Irish Fin Facts portal as having found that Cape Town is one of the most affordable cities in the world for expatriates. The 2010 survey is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowance for their expatriate employees who work in other parts of the globe. The survey covered 214 cities across five continents and measured the comparative cost of over 200 items in each city which includes housing, food, alcohol, transportation, entertainment and accommodation. New York is used as the base city for the index and all cities are compared against New York. Cape Town has ranked as one of the most affordable international destinations.



For the first time, the ranking of the world’s top 10 most expensive cities includes three African cities as Mercer has said that the growth potential in Africa has led to greater interest because of the increase in demand for information on African cities from across the business spectrum – mining, financial services, airlines, manufacturer, utilities and energy. Luanda in oil-rich Angola has become the world’s most expensive city in the world for expatriates, with Tokyo in 2ndposition; Ndjamena in Chad in 3rd place. Moscow is 4thfollowed by Geneva in 5th: London and Paris jointly rank 17th , while Tel Aviv (19) is the most expensive city in the Middle East, followed by Abu Dhabi (50) and Dubai (55). New York; the benchmark city for the survey (27) is the most expensive US city followed by Los Angeles (55). Cities in Brazil are amongst the most expensive locations in the Americas with Sao Paulo (21) ranked as the most expensive city in both North and South America, as a result of the strengthening of the Brazilian Real against the US Dollar, and Rio de Janeiro (29) is the second most expensive city. Full details of the findings can be read at : http://www.finfacts.ie/costofliving.htm


In South Africa, Johannesburg and Cape Town rank 151 and 171 respectively, outshining the affordable holiday destinations of Hanoi, Vietnam and Bangkok in Thailand (both at 121); destinations that often compete for South African holidaymakers as exotic and affordable.


Although the survey did not focus specifically on the tourism and leisure industry, the commodities that have been surveyed in these international cities are those that affect the cost of a holiday and should be of interest to prospective tourists, as it shows that South Africa remains one of the world's most affordable holiday destinations, in spite of the strengthening of the South African Rand. This very up-to-date survey has taken into account currency fluctuations against the dollar and should be heartening news to all of us in the hospitality industry in South Africa.


Another interesting survey was recently carried out of construction in the hotel industry in Cape Town. It revealed that there had been substantial growth in new hotels and the number of rooms in the 4 and 5 star category during 2010. The survey, however, found that there has been almost no new construction in the affordable range which is the three star and 2 star hotel accommodations. It drew the conclusion that the sector of the market had “stagnated “which is why there had been no significant new construction. I think what they have missed is that the extensive network of Western Cape accommodation, including good quality and professionally run guesthouses, B&Bs, lodges and self-catering accommodation has successfully cornered that niche of the market from the hotel industry. While some of the non-hotel accommodations are undoubtedly in the luxury bracket, the majority of those listed as members of Cape Town Tourism definitely cater for those who seek good quality, comfortable but affordable Cape Town holiday accommodation.
Cape Town tourism has advised that its members are looking forward to 2011 with “cautious optimism”. When looking at the tourism prospects for 2011, I believe that all of us in the business of offering guest accommodation, in the non-hotel sector, can look forward to an exciting year because there are so many factors in our favour. Local tourism, which accounts for a large segment of our market, is not adversely affected by the strong South African Rand, since prices for them remain unchanged, and when one compares the high cost of the usual competing south-east Asian cheap holiday destinations, accommodation in Cape Town still offers the best value for money holiday accommodation available. Visitors from our traditional European and UK markets are sure to still find Cape Town to be a desirable and economical holiday destination, and it is to be hoped that we can grow the enormous potential that exists in the USA.


Best wishes for a succesful 2011 to all in the industry from Horizon Holiday Cottages in Noordhoek.