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Fewer tourists visiting SA, #DayZero had negative impact

By LUKE FOLB Time of article published Jun 30, 2019

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Cape Town - A new report shows that fewer international tourists are visiting South Africa - compared to other popular destinations on the continent.

The findings, by auditing firm PricewaterhouseCoopers (PwC), looked at the hotel industry in five African countries - South Africa, Nigeria, Mauritius, Kenya and Tanzania.

The report says despite an economic downturn and less foreign investment, growth in Africa’s hotel sector is expected to continue rising over the next five years.

Growth is expected to pick up this year and is forecast to expand to R19.7billion in 2023, up 3.3% from R16.7bn last year.

This relatively modest increase will reflect the expectation of low growth due to online booking and the increasing use of travel sites to find the lowest accommodation prices.

Growth in foreign visitors to South Africa dropped to 1.7% last year, down from the 2.4% gain in 2017 and the 12.8% increase in 2016. 

The slowdown reflected concerns about the drought in Cape Town and the possible approach of Day Zero when Cape Town would run out of water.

Wesgro chief executive, Tim Harris said despite the drought, South African Tourism data showed that the Western Cape’s international market remained resilient, recording 1.7million international tourist arrivals last year and reflecting a positive growth of 0.2%.

Harris said the tourism sector contributed R15.5bn towards the Western Cape, increasing by R3.65bn between 2013 and last year.

“The accommodation sector is one of the biggest contributors and a significant contributor to employment.

“However, industry challenges such as the drought and economic constraints definitely have an impact upon job creation,” he said.

According to Wesgro, there are more than 275000 people employed in the tourism industry in the Western Cape. The tourism industry employs moire than 1.5 million people, which represents 9.5% of the country’s total workforce.

The Airbnb market has also grown locally, with rentals in Cape Town increasing from 10000 in 2015 to around 40000 last year.

According to the PwC report, it does not appear that the Airbnb increase will have a major effect on hotels in Cape Town because most of the Airbnb traffic occurs at peak periods when hotels are full.

Velma Corcoran, Airbnb country manager for Sub-Saharan Africa, said from June 1, 2017 to May 31, last year, it has been estimated that host and guest activity on Airbnb generated R8.7bn in economic impact and this corresponds to a total of more than 22000 jobs supported across the broader economy.

Overall room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 7.4% last year, up from the 1.9% increase in 2017, but room revenue growth in South Africa fell to only 0.5% - its smallest increase during the past six years.

The Nigerian market grew by 20% last year and is forecast to continue to grow at a 12% growth rate over the next five years.

Hotel room revenue in Mauritius increased by 11.7% last year and the island continues to experience growth in foreign visitors.

Kenya experienced an increase in visitors resulting in a 37.3% overall growth in visitor numbers last year.

However, a terrorist incident in Nairobi this year may impact on visitor numbers.

Tanzania’s hotel room revenue amounted to $222m (R3bn) last year.

Weekend Argus

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