Capital Hotels, IDC invest $16.2 million in Gqeberha as hospitality moves beyond cities

Capital Hotels Group, a South African hotel chain, in partnership with the Industrial Development Corporation (IDC), has opened a R270 million ($16.2 million) hotel and apartment development in Gqeberha, adding 145 rooms and serviced apartments to the Eastern Cape city’s hospitality stock. 

The project sits within a mixed-use precinct linked to the Boardwalk leisure complex, nearby beachfront areas and retail facilities. It reflects a shift in South Africa’s hospitality sector, where new developments are increasingly tied to integrated precincts serving both business and leisure travellers. 

Rather than focusing only on major metros such as Cape Town, Johannesburg and Durban, developers are steadily expanding into secondary cities where tourism flows and regional business activity are rising.

Tourism contributes nearly nine percent GDP 

South Africa’s tourism sector has continued to recover since pandemic-era disruptions, prompting renewed confidence in hotel development. 

The country recorded about 10.5 million international arrivals in 2025, up 17.7% from a year earlier and above pre-pandemic levels. Visitors from elsewhere in Africa accounted for a large share of inbound travel, reinforcing regional mobility as a key driver of demand. 

Tourism remains a significant part of the economy, contributing close to 9% of gross domestic product and supporting an estimated 1.8 million direct and indirect jobs across hospitality, transport and related services. 

Industry participants say the improvement in arrivals is gradually changing how capital is deployed. Instead of concentrating mainly on restoring paused projects, developers are increasingly looking at new capacity in locations that previously received less investment. 

Gqeberha blends industry and tourism

Gqeberha, located along South Africa’s eastern coastline, has long been anchored by manufacturing and logistics activity. The Coega Special Economic Zone, the BAIC automotive assembly plant and Aspen Pharmacare’s operations have all helped sustain steady business travel into the region. 

Capital Hotels Group chief executive Marc Wachsberger said the city’s combination of industrial activity and coastal tourism gives it a more stable demand profile than often assumed. 

He pointed to the city’s port, manufacturing base and logistics links as factors that support year-round occupancy beyond seasonal leisure travel.

IDC focuses on tourism-linked development 

The IDC, a state-owned development finance institution, has increasingly supported tourism projects as part of its wider industrial development mandate. 

IDC head of services Kagisho Bapela said hospitality remains an important source of employment and local economic activity, particularly in cities outside South Africa’s primary metros. He added that investments in places such as Gqeberha help strengthen regional economic networks and support small business growth linked to tourism. 

The Gqeberha project is the 12th hotel investment by Capital Hotels in South Africa and the second developed in partnership with the IDC, following their earlier collaboration in Mbombela in 2021.

Capital Hotels grows urban portfolio footprint

The development forms part of a broader pipeline of tourism and hospitality investments across the country, as both domestic and international operators expand capacity. 

Among upcoming projects is the Club Med South Africa resort in KwaZulu-Natal, expected to open in July. It is one of the largest leisure-focused developments in the country in recent years and signals continued interest in large-scale tourism infrastructure. 

Capital Hotels, Apartments & Resorts, founded in 2008 by Marc Wachsberger and based in Johannesburg, operates a portfolio of hotels and serviced apartments across major South African cities. The group has expanded steadily in recent years, adding properties in Sandton, Rosebank, Menlyn, Cape Town and Umhlanga, and continues to pursue a growth strategy focused on urban and regional hubs. 

The IDC, established in 1940 and owned by the South African government, provides development finance to support industrialisation, job creation and inclusive economic growth. Its portfolio spans manufacturing, mining, agriculture and services, with increasing emphasis on tourism as part of its broader development mandate.