PROSPECTS for the five-star hotel market in South Africa are looking brighter despite global uncertainty, Pam Golding Hospitality CEO Joop Demes said.

"As far as many of us can remember, Europe's financial future has never seemed quite so fragile.

"To comment with any certainty on the 2012 outlook for Europe and on the euro-rand exchange rate will depend on Europe's politicians showing sound leadership by saving the euro through fiscal and monetary reform," Demes said yesterday.

While Africa has been fairly insulated from the eurozone crisis due to its lack of meaningful integration into the global financial system, fluctuations in the rand's exchange rate play a major factor in foreign investment and value-for-money proposition for foreign tourists to SA.

The rand exchange rates to the euro, pound and dollar during December last year and last month, translated on average to a 15% discount compared to prices last season.

And according to Demes, there was no doubt that this contributed to a sharp improvement in high-end leisure business in Cape Town and to a lesser extent in Johannesburg.

"Lead times for visitor bookings are indeed becoming shorter and the 2010 Soccer World Cup gave many new visitors a favourable impression, which is clearly paying off as foreign tourists are attracted by word-of-mouth recommendations from friends and family who were here.

"This is coupled with prices that are lower compared to the prices during the World Cup event," he said.

Statistics from the December 2011 STR Global South African Hotel review show that Cape Town's 5-Star market experienced a pleasing final quarter of 2011, with figures averaging 66.4%, reflecting an increase of 18.1% compared to the same period in 2010.

The hotels increased their 2011 annual average occupancy by 8.5% compared to 2010 .

They also managed on average to increase their room rate by 2.3% during December 2011 compared to December 2010.