Tourism performs better than expected

The tourism business index has shown greater levels of optimism among most operators.Image: Master Isolated Images Free Digital Photos

The sector experienced above-average performance of 114.6 points compared with an expected level of 110.8. The index also revealed that for the first quarter of 2014‚ the industry expected to achieve better than the "normal" level of 111.3.

"Normal" is measured against an index of 100 and defined as the level of acceptable business performance in line with the realistic long-term average performance hoped to be achieved‚ or historically experienced‚ by respondents during this quarter.

Compiled quarterly by Grant Thornton for the TBCSA‚ the index separates the industry into two sub-indices‚ accommodation and other tourism businesses which includes tour and coach operators‚ vehicle rental‚ airlines‚ travel agents‚ retail outlets‚ foreign exchange traders‚ conference venues and attractions.

Respondents in the accommodation sector achieved their expectations‚ experiencing an index of 110.8 compared to a predicted level of 110.

The other tourism business sector punched above its forecast level of 111.4 to achieve an index of 117.2.

However‚ the accommodation sector has a negative outlook for 2014. For the sixth consecutive quarter‚ the costs of inputs remain the most cited negative factor contributing to the sector. The cost of labour is also a major concern with 24% of respondents indicating it is an impediment to business performance.

Other negative factors cited by respondents were insufficient overseas leisure demand and competitor market behaviour.

The increase in the fuel price‚ motor industry strikes affecting delivery time‚ supplier incompetence‚ lack of marketing‚ poor road infrastructure‚ political influences‚ as well as the effect of former president Nelson Mandela's death were the negative factors faced by respondents in the other tourism business sector.