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. Last Updated: 07/27/2016

Hotels Eye Anti-Poverty Profit

JOHANNESBURG, South Africa -- South Africa's hotels are hoping to cash in on a boom inspired by the global environment and anti-poverty summit in late August.

Escalating demand for accommodation ahead of the World Summit on Sustainable Development -- or Earth Summit 2 as it is popularly known -- is driving prices higher.

But hoteliers warned this week that the failure to hammer out a concrete draft declaration in Bali, Indonesia, in June could lead to a lower turn-out by delegates -- significantly hurting earnings prospects.

"I think the hotels are very ready for the summit, but we are still a bit concerned that we may not reach the numbers [delegates] expected because of the delay in the drafting of the agenda by the UN," said Willem Fick, executive director at the Federated Hospitality Association of South Africa.

FEDHASA is a grouping representing some 1,700 businesses.

The WSSD is expected to be attended by around 65,000 delegates, including 100 heads of states, according to South African government officials -- though the numbers remain uncertain.

The summit, which will be held at the same time as a meeting of non-governmental organizations called the Global Forum, aims to map out a strategy for achieving global development goals in a sustainable way without inflicting irreparable damage on the environment.

It will take place from Aug. 26 to Sept. 4 in Johannesburg -- South Africa's biggest city and the country's financial center.

Up to 53,000 beds within Johannesburg and the surrounding areas have been booked so far by JOWSCO, a government agency organizing the summit -- the biggest UN gathering ever.

A shortfall will be offset by a program which allows ordinary home owners to rent out their private houses to delegates.

Many activists are expected to sleep on Johannesburg's mean streets -- where they will be holding their demonstrations for various causes -- though the city's well-earned reputation for violent crime could prove a deterrence to sleeping in the rough.

Some hotels and guest houses have raised their rates sharply to cash in on rising demand ahead of the summit, undermining the government's efforts to keep prices at an optimal level and market South Africa as one of the world's best-value holiday destinations.

Last year, a survey conducted by hospitality consultants Grant Thornton Kessel Feinstein indicated that Johannesburg stood to earn 1.2 billion rand ($115.9 million) from the summit.

The study saw the rest of the country earning 150 million rand as delegates visited destinations outside Johannesburg -- including the famed Kruger National Park.

"The demand is obviously driving prices up," said Thandi Davids, spokeswoman for JOWSCO. "Foreign tourists view South Africa as a cheap holiday destination and that is why many people choose to come here, and this now may affect that perception."

But Fick said many FEDHASA members had not raised prices and insisted hotel rates in Johannesburg remained some of the lowest in the world.

The industry would simply maximize on the numbers of delegates, with occupation rates expected to soar.

"The hotel rates in South Africa are way below international standards and I don't think generally the industry is exploiting its position. We must also realize that this is a free enterprise and that supply-demand dictates the rates," he said.

Hotel rates range from an average of 200 rand for bed and breakfast to several thousand rand a night.

South African Tourism said those who have raised tariffs are sending the "worst possible" message to the rest of the world and are shortsighted about the country's tourism ambitions.

"This is a once in a lifetime opportunity for the South African industry to showcase itself to the world as a mature, quality, value for money preferred tourist destination," said SATOUR chief financial officer Johan van der Walt.