South Africa is at the convergence of several powerful long-stay demand signals, and the hospitality sector is not keeping up with any of them. The Digital Nomad Visa, formally implemented in March last year, allows foreign remote workers to reside in the country for up to three years while earning income from international employers, says Anthony Batistich, the general manager for @Sandton Hotel.
He says Cape Town alone is projected to contribute approximately $3.78 billion to GDP by 2026 through this segment. These are not transient tourists. They need accommodation that functions as a working home over months rather than days, and a standard hotel room, regardless of its quality, simply does not answer that brief, says Batistich.
Extended-Stay Hotels on the Rise
Extended-stay hotels have maintained an occupancy rate about 12 percentage points higher than the overall hotel industry for four years straight. Even during the 2020 contraction, their average occupancy held at roughly 60%, significantly beating the rest of the industry. The hotel industry is taking notice, with the extended-stay market valued at $57.7 billion in 2024 and projected to reach $98.8 billion by 2030, at a compound annual growth rate of 9.5%.
Why Extended-Stay Hotels Work
The model works because it mirrors how guests actually use the space: fewer daily turnovers, lower housekeeping intensity and guests who have made a considered decision to be where they are rather than simply passing through. According to Batistich, when the entire commercial model is built around average daily rate and short-stay occupancy, a guest seeking a monthly rate looks like a revenue dilution problem rather than an occupancy stability solution.
Here are some key statistics that highlight the growth of the extended-stay market:
- 89% of companies deploying assignees in Africa are doing so on long-term projects, according to research by Crown World Mobility.
- Gauteng holds the largest share of South Africa’s hospitality market, and business travel already generates a disproportionate share of revenue relative to its volume.
- Extended-stay brands now account for roughly one-third of the hotel construction pipeline in North America and Europe.
The demand for extended-stay hotels is already here, and it is up to the hospitality sector to respond. With the right approach, South Africa can capitalize on the growing trend of digital nomadism and become a hub for remote workers from around the world.
