Boutique and service apartments lead growth in SA’s hospitality sector

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Meanwhile, the boutique hotel market in South Africa generated $278.1m in 2024 and is forecast to grow to $442.1m by 2030, at a CAGR of 8.1%.

Sector snapshot and growth drivers

Travellers are increasingly shifting from generic hotel stays to boutique and serviced apartment accommodations that offer local authenticity, design-forward spaces and immersive guest experiences. In South Africa, this trend is accelerating as international travel rebounds and domestic tourism strengthens.

For instance, in May 2025, national hotel occupancy rose to 59.5%, up 6.9% year on year, while the average daily rate (ADR) climbed 8.5% to ZAR 1,747.04, according to STR data.

Entrepreneurs show the shift

Two South African entrepreneurs are exemplifying how the market is responding:

• Wendy Thembeka Dlomo – Founder of The Living Collective. Based in the KwaZulu-Natal Midlands, her brand now spans countryside homes and a coastal flagship in Ballito. "I wanted to create spaces where guests could feel the warmth and elegance of African design while enjoying modern luxury," she says.

• Eva Biyela – CEO of Big Sky Travel and Tours, a 100% Black woman-owned company that has grown from a small agency in White River to a multi-branch operation across South Africa and into Eswatini. "Our goal is to make every trip seamless and memorable," she explains, covering both high-end leisure and complex corporate bookings.

Both are finalists in the Business Partner Limited Entrepreneur of the Year® Award, illustrating how innovation and entrepreneurship are reshaping the hospitality landscape.

What it means for travellers and industry players

This evolution in accommodation reflects a broader shift: guests are no longer simply seeking places to stay but experiences to remember.

Service apartment models, locally crafted interiors, tailored guest services and tech-enabled bookings are becoming standard for discerning travellers.
For operators, the implication is clear: adapt or risk being left behind.

Those who invest in training, local partnerships and sustainability initiatives tend to stand out. According to the market data, the luxury segment in the boutique hotel sphere is the fastest-growing in South Africa.