An aerial shot of the Knysna Waterfront. Photo: Wikimedia Commons
South Africa’s tourism industry remained resilient, and the relaxation of visa requirements last year buoyed overall revenue to R15.8billion with a 12.2percent rise in room occupancy. This is according to the latest PricewaterhouseCoopers (PwC) annual hotels outlook, which covered South Africa, Nigeria, Mauritius, Kenya and Tanzania.

PwC hospitality industry leader Pietro Calicchio said the increase in revenue was largely aided by international tourists who had visited the country last year.

Calicchio said international visitor numbers to South Africa rebounded significantly last year, with a 12.8percent increase, compared with a 6.8percent decrease in 2015.

“This was mainly due to the relaxation of visa requirements that contributed to the growth in foreign tourism,” Calicchio said, adding that the firm forecast that hotel room revenue would grow 10.1percent to R17.5bn this year.

The report also found that Southern African Development Community countries contributed 73percent of the visitors to South Africa during the period under review, while travellers from China and India increased 38percent and 21.7percent respectively.

It said the the largest number of foreign visitors to South Africa last year came from Zimbabwe, at 2million, followed by Lesotho, at 1.8million, and Mozambique, at 1.3million.

The survey projected that Nigeria would be the fastest-growing market from a revenue perspective over the next five years, with a projected compound annual increase in revenue of 14.7percent.

It said Africa’s most populous nation would benefit from an improving economy, continued growth in domestic tourism, and an expansion in the number of available rooms, which would keep average room-rate growth lower than the rate of inflation.

The report said South Africa would have the second fastest-growing market, with a 9.3percent compound annual increase in room revenue, most of which would come from rising room rates and continued but moderating growth in tourism. It said the Kenyan market was expected to expand at a compound annual rate of 7.5percent, buoyed by a strong domestic economy, government investment in infrastructure, and growth in available rooms that will limit room-rate growth.

However, PwC warned that although Tanzania’s newly imposed value-added tax on tourism services would increase room revenue by a compound annual rate of 6.9percent over the next five years, it would result in a decline this year.

Revenue increase

The professional services firm said the combined revenue of the five markets would increase at an annual compound rate of 8.7percent, from R39bn in 2016 to R59.2bn in 2021.

Calicchio said planned investment in infrastructure would put South Africa in good standing to attract more visitors in the next few years.

The expected new developments include the Radisson Blu Hotel & Residences and Radisson Red V&A Waterfront, the Maslow Time Square Hotel in Pretoria and, in Cape Town, the Tsogo Sun Stayeasy, the Tsogo Sun Sunsquare Hotel and the Silo Hotel.

“It is promising to see a growing number of new hotels planned for the South African market over the next five years,” he said. “We expect the overall number of available rooms to increase at a 0.9percent compound annual rate, thus adding 2700 rooms over this period.”

BUSINESS REPORT