Destination South Africa Is Doing Well

Cape Times (South Africa), September 15, 2011 | Go to article overview

Destination South Africa Is Doing Well

The world has experienced fundamental changes over the past few months, thereby altering our tourism marketing and operating environment considerably.

If one takes a cursory glance at some of these global developments such as the social media-led revolutions in north Africa and the Middle East, catastrophic natural disasters in Japan, the enduring American and European debt crises, right-wing terror in the land of the Nobel Peace Prize, riots in the streets of London and the turbulence in our own society, tourism is clearly in for a radical reconfiguration.

So, when we talk about a "crisis" in Western Cape tourism, it must be located within a proper context. Although one cannot deny that our industry is currently under severe strain, the myriad emotional arguments and blaming games to explain both the causes and solutions to this "crisis" could be counter-productive and must be a major cause of concern.

This has been a long, bleak winter. Accommodation occupancy concerns, hotel closures and difficult trading conditions in the tourism industry are well documented. It is important, however, to pause and think about the wider context of the problem, and the realities of both the market and destination offerings.

Firstly, we must, of course, remember we are just coming out of our winter months and current arrivals are similar to those of winter 2008. Naturally, winter performance this year cannot be compared to last year when we hosted the World Cup.

The tourism industry is subject to the vagaries of seasonality, and it is completely normal for occupancy to dip during the colder months - as it did this year.

Secondly, there is a marked over-supply of tourism (and other) infrastructure. A survey by PricewaterhouseCoopers found that South Africa gained about 10 000 more hotel rooms between 2007 and 2010. That is 21 percent more.

Thirdly, we must not forget that going on holiday is a luxury. The world continues to hurt from the 2008/2009 recession and consumers are concentrating on getting back on their financial feet. This means keeping up with essential expenses and sacrificing luxury buys.

And, speaking of costs, airfare (pushed up by rising fuel costs) to South Africa is a massive factor. Airport taxes and unfavourable exchange rates push the costs up further. We see this in modest arrivals growth from the traditional markets, where travellers are now choosing short-haul holidays instead of trips to long-haul destinations.

Long-haul airfare costs - compounded by lingering recession damage - do not only affect us, but the whole world.

Last but not least, it's also become far more expensive to run a tourism business today. The costs, in fact, of operating a business have risen by an estimated 22 percent in the last three years.

Rising costs are driven by the cost of electricity, water, municipal levies, labour, and food prices. Businesses, understandably, struggle to remain viable when demand for their services wanes.

Despite the above, destination South Africa is doing well. The most recent 2011 first quarter statistics released by Statistics South Africa show a 7.5 percent year-on-year increase in all arrivals, with overseas arrivals growing by 9.7 percent, a trend roughly followed by the Western Cape.

Seven airlines are already (or will be) operating new flights into Cape Town. These equate to an additional 20 flights a week into South Africa, giving evidence of the strong confidence the international sector still has in our destination.

Encouragingly, India, China, Brazil, Russia and African markets have emerged as tourism markets with great potential for South Africa. In April, year-on-year arrivals from India were up more than 50 percent. Chinese arrivals had grown 25.6 percent and arrivals from Brazil had grown by more than 38 percent. Arrivals from the DRC grew by more than 21 percent and arrivals from the UAE had grown by almost 31 percent. …

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