Tourism Minister Patricia de Lille said an increase in the number of direct flights returning from America, Brazil and China was testimony to the fact that tourism remained an attractive destination, for both domestic and international travellers. Photo: Supplied
Load shedding has remained the leading challenge in the tourism industry, especially the accommodation businesses, as it reported below than normal business performance in the first half of 2023.
The latest Tourism Business Index released on Thursday, showed that the tourism industry achieved below normal business performance of 76.0 index points in the six months to June.
Normal business performance is then calibrated to an index of 100, and a reading higher than 100 indicates better than normal performance while below 100 indicates worse than normal performance.
These TBI results were released at the opening of the Tourism Leadership Conference 2023 hosted by the Tourism Business Council of South Africa (TBCSA) in Sun City, North West, yesterday.
At least 80 percent of businesses surveyed cited load shedding as an issue that had a significantly negative impact on their business, followed by service delivery, safety and security, socio-economic and political environment and air access.
TBCSA CEO Tshifhiwa Tshivhengwa said the below-normal business performance was driven largely by the persistent energy crisis, in addition to the slow economic growth, and the rising cost of living.
Tshivhengwa said the major contributors to the significantly below normal business performance were the cost of alternative power supply such as diesel and generator costs, batteries, as well as increased operating costs in general which affected operational performance, in addition to safety and security concerns that dampened demand.
“The accommodation sector has been the worst affected, with high input costs caused by load shedding, as well as inflation negatively impacting business performance,” Tshivhengwa said.
“Unfortunately, the outlook for accommodation businesses remains pessimistic for the next half year when it comes to the cost of alternative power supply, safety and security concerns, cost of inputs, as well as insufficient overseas and domestic leisure demand.”
However, the outlook for the remainder of 2023 was positive, with near “normal” performance of 101 index points expected for the second half of the year.
Tshivhengwa said they were encouraged by data from Statistics South Africa year-to-date revealing that foreign tourism arrivals for the period had exceeded 2019 and even 2018 levels for the same period, driven mainly by the African market.
He said the lifting of Covid-19 restrictions, strong overseas leisure demand as well as improved efficiencies accounted for the few meaningful positive factors contributing to business performance in the first half of 2023
“We remain hopeful that the strong foreign arrivals recovery will continue as positive sentiment returns to our industry. Feedback from the industry on future booking levels is optimistic as strong overseas arrivals as well as improved domestic demand are anticipated for the second half of 2023,” Tshivhengwa said.
TBCSA is projecting that tourism will attract 8.75 million foreign tourists for the year 2023, with the number sitting at 4.8 million foreign tourists in the year-to-date by the end of July.
Tourism Minister Patricia de Lille said an increase in the number of direct flights returning from America, Brazil and China was testimony to the fact that tourism remained an attractive destination, for both domestic and international travellers.
“Our goal is to surpass pre-Covid arrival numbers and exceed 10 million arrivals by the end of March 2024 and the numbers thus far are encouraging as we gear up for a bumper summer season,” De Lille said.
“Spend from international arrivals was R48 billion for the period January to June 2023. This is a notable increase from the foreign arrivals spend for January - June 2022 of R21.5bn.”
To accelerate the recovery of tourism, specifically the overseas market, tourism stakeholders indicated that the sector needed significant investment into destination marketing in key source markets as well as addressing growing concerns around safety and security.
The need to develop a fully automated world-class e-visa system with improved airport e-infrastructure was highlighted as a primary concern as it will ease the red tape in the issuing of visas and help boost arrivals.
The conversation on the waiving of visas for visitors from source markets is being advanced and actioned as thus.
Home Affairs Minister Dr Aaron Motsoaledi shared that his department was working to expand to e-visa system to include other visas such as study, business travel and eventually travelling groups.
Motsoaledi said his department was aware of the backlogs in the issuing of visas, but work was being done to address them.
“We want as many people to come into the country. But my priority is to ensure that it is the right kind of people who are allowed into South Africa,” Motsoaledi said.
“Our responsibility is to ensure that undesirable people do not enter the country.”
BUSINESS REPORT