Turbulence ahead for travellers in 2017

© Umberto Leporini – 123RF.com

But there is no holding back the tide that is the struggling economy.

While Flight Centre Travel Group (FCTG) recorded sales growth of 10% in 2016, overall travel in South Africa remained stagnant.

While our international air sales grew by 10%, the industry remained flat. FCTG’s domestic air sales grew by 11% versus the industry, which declined by 2%. Overall FCTG was up 11% on 2015, compared with the South African travel market declining by 1%.

But the unpalatable truth is that while FCTG is winning more of the travel pie, the pie is simply not growing.

FCTG’s growth in 2016 came on the back of affordable travel deals, value-for-money destinations, our lowest airfare guarantee, our corporate brand, FCM Travel Solutions, winning some very large corporate travel accounts and efficiencies as a result of growing our market share, not because more South Africans are travelling.

In reality, South Africans – both ordinary and corporate citizens – are cutting back on travel wherever possible… and will continue to do so in 2017.

Local and closer-to-home travel is booming compared with international travel, and corporates are cutting back on travel where possible – from first to business class, from business to premium economy class, and from economy class to a conference call.

However, despite challenging times, corporates are always looking for new ways to increase or generate new business and this generally always means venturing into new territory, which can have a positive effect on travel.

Nonetheless, the struggling economy and its impact on the currency had a huge impact on travel in 2016, and will continue to do so in 2017.

FCTG experienced first-hand the impact of the volatility of the rand last year.

We thought we would see a slump in demand for travel at our annual Travel Expo, which took place in February, less than two months after the sacking of Finance Minister Nhlanhla Nene.

However the complete opposite occurred.

We had record results over the Expo, then six to eight months later (around August / October), European sales slumped due to people feeling the brunt of an unfavourable exchange rate and vowing not to do it again.

Alongside the economy, there is also the threat of terrorism. There is no doubt that terrorism is having an impact on South African travelers, with an increasing number eschewing destinations like France, Egypt, Kenya and Turkey which have been hit by terror attacks.

However, the real roadblock to South African travel is the struggling economy.

But while the more expensive destinations are likely to take a knock in 2017, value-for-money destinations like Zanzibar, Thailand and Mauritius will continue to draw South Africans, as will all-inclusive deals. Local travel will also remain robust.

Travel is resilient, and new markets, mediums and customer types will open up in 2017. Customers will continue to dictate the ways in which they prefer to be interacted with, which will push new boundaries.

FCTG is determined to ride the crest of the wave and we are focusing on innovation, African growth (our first store outside of South Africa opened in Windhoek, Namibia on 12 January 2017) and expansion into the corporate travel management spheres to help us grow our slice of the pie.

2017 will no doubt be tough for South African travellers, but as we all know, South Africa – and travel – is not for the faint-hearted.