#BizTourismReport: SA tourism market analyses for April 2019

Image source: Gallo/Getty

Arrivals

The data from Statistics South Africa for January to December 2018 are as follows:

Please note that African tourists plus overseas tourists do not add to total foreign tourists due to the exclusion of unspecified tourists which could not be allocated to either African or overseas.

The latest available data from Statistics South Africa for January 2019 highlights the decline in the main source markets for foreign tourist to South Africa during 2018 due to an amalgamation of various factors. In the UK, the impact of Brexit has led to uncertainty for UK tourists who has either cancelled their travel plans, delayed their travel plans or travelled to cheaper destinations closer to the UK. Foreign tourism from the UK declined by 3.8% in 2018 and continued to decline by 4.2% in January 2019 (the latest available data).

Please note that African tourists plus overseas tourists do not add to total foreign tourists due to the exclusion of unspecified tourists which could not be allocated to either African or overseas.

This uncertainty was also reflected in the behaviour of German tourists, although slightly tempered, as the German economy struggled in 2018. UK tourists declined by 3.8% in 2018, while German tourists declined by 1.7% in 2018. The impact of the decline in the German GDP in the 3rd and 4th quarter of 2018 could be seen in the decline of 11.1% in German tourists to South Africa in January 2019.

A combination of visa restrictions and limited direct flights has impacted on the ability of the volume of Chinese and Indian tourists to South Africa to grow. The growth of 22.4% in Chinese tourists during January 2019 is from a low base.

Foreign tourists from the USA has shown some growth off the back of a growing USA economy and South Africa being in the spotlight through celebrities such as Trevor Noah.

Hotel statistics

The hotel statistics are supplied by STR, which has analysed and reported on data from 63,000 hotels, representing 8.4 million rooms in 180 countries.

The data from STR for January to December 2018 is as follows:

Source: STR Global 

The latest available data from STR is for January to February 2019:

Source: STR Global 

The latest available data from STR reflects a decline in hotel occupancy during 2018 as foreign tourism declined and the slow South African economy put pressure on domestic tourism. Hotel occupancy declined for all grades of hotels, but 4-star hotels and 3-star hotels were able to grow their rates slightly in 2018. This growth was below inflation and not enough to ensure growth in RevPAR.

The declining trend continued in January and February 2019. The decline is expected to continue in 2019 as the factors impacting on the decline in foreign tourism and stagnation of domestic tourism is not expected to ease in 2019.

Airport arrival data:

The data from ACSA for January to December 2018 is as follows:

The latest available data from ACSA is for January to February 2019:

Please note that passengers arriving on international flights may be South African’s returning from an international trip. Similarly, passengers arriving on a domestic flight might be foreign tourists travelling on a domestic airline between domestic destinations.

Data from ACSA reflects the decline in foreign tourism in the lack of growth in arrivals on international and regional flights to OR Tambo in 2018. The growth in passengers arriving on international flights to Cape Town International Airport can be attributed to the success of the Air Access initiative implemented to attract direct flights to Cape Town.

The stagnation of the domestic tourism industry can be seen in the decline of the number of passengers arriving on domestic flights at Cape Town International and the slow growth of arrivals on domestic flights at OR Tambo. Growth in international, regional and domestic arrivals to King Shaka International has been obtained from a low base and is due to additional capacity being provided by airlines such as Emirates.

Conclusion

The data does not paint a rosy picture of the performance of the tourism industry in 2018 and the bad news continued in the first two months of 2019. In my humble opinion, growth in foreign tourism will be sedated for the next couple of months while Brexit is being sorted and growth in the source market economies slowly recover. Similarly, the growth in domestic tourism is expected to be slow mirroring the slow growth in the South African economy.

The hope is that the South African economy will gather momentum after the elections when a (hopefully) restructured cabinet can address the many restraints on economic growth.