Tourism business index up

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Filomena Scalise

Johannesburg - Tourism boomed beyond expectations in the final three months of last year, the Tourism Business Council of SA (TBCSA) said on Friday.

It said the TBCSA/FNB tourism business index, compiled for the council by consultancy firm Grant Thornton, finished at 114.6

points at the end of the year versus the expected 110.8 points.

“This positive result consolidated a year in which only one quarter, the second quarter, saw performance marginally below normal.”

The index covers the tourism accommodation sector, transport, attractions, and meetings and conferencing, with it being an overall indicator of business health in the tourism sector.

Chief executive Mmatsatsi Ramawela said the council was pleased with the index's latest results.

“The fourth quarter has closed 2013 on a high note which is rewarding for an industry that has struggled since hosting the 2010 Soccer World Cup,” she said.

“It's pleasing to note that the index results complement the results of Stats SA's accommodation survey released recently, which shows strong performance from tourism accommodation in various categories.”

The latest index results were a sure sign of the resilience of tourism in South Africa, as it is reflected globally.

“Tourism stands out against the ongoing economic woes affecting other economic sectors globally,” she said.

Gillian Saunders, head of advisory services at Grant Thornton, said it was pleasing that the index had outpaced the tourism industry's own expectations.

The index was a survey which splits respondents into two sub-categories, being accommodation, and other tourism businesses which includes tour and coach operators, vehicle rental, airlines, travel agents, retail outlets, forex traders, conference venues and attractions.

Other tourism businesses showed better than normal business conditions in the fourth quarter of last year, scoring 117.2 points compared to the expected 111.4.

This was influenced largely by the positive performance from car hire, conference centres, tour operators and retail respondents.

Throughout the life of the index, other tourism businesses had shown a more positive outlook and the latest index showed this.

Accommodation virtually achieved their expectations, with a score of 110.8 points in the fourth quarter, compared to the expected level of 110,0.

For 2014, the outlook by accommodation respondents was negative, being -22.4 percent.

Since the index's inception, the accommodation sector had only once had a positive outlook for the next year.

The outlook of other tourism businesses sector was positive, at +28.4 percent for 2014.

The TBCSA said: “The majority of respondents in both sectors indicate that their employment levels will stay the same, so we can expect overall employment growth to remain muted into the future.”

The accommodation sector indicated some shrinking in employment, with a negative balance of -19.4 percent.

“Capacity expansion remains positive in terms of the accommodation sector and other tourism businesses, with both expecting a positive balance for the first quarter of 2014,” the council said.

“The accommodation sector anticipates a weak positive balance of +5.4 percent, while other tourism businesses anticipate a strong positive balance of +40.7 percent.”

Input costs was the most cited negative factor impacting the industry, which also included insufficient overseas demand, labours costs and competitor behaviour.

Both the accommodation (20 percent) and other tourism businesses (26 percent) experienced insufficient domestic business during the previous quarter.

Positive factors included the favourable foreign exchange rate, business improvements and increased marketing. - Sapa


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