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Tourism numbers paint a bleak picture for the industry

Source: MoneyWeb, 20/06/2018

Any thought that South Africa’s new era under President Cyril
Ramaphosa would see tourists flocking back in their numbers was put to
rest by tourism arrivals figures for April.

The figures, which show an almost 7% decline in foreign arrivals,
paint a bleak picture for an industry that was earmarked by Ramaphosa
as one of four sectors that will reignite the economy.
The figures also reflect what many expected �` that the water crisis in
the Western Cape has likely cost the economy dearly.
Residents queue to fill plastic water bottles at a natural water
spring on the site of SABMiller’s Newlands brewery in Cape Town in
February. Picture: Waldo Swiegers/Bloomberg
StatsSA said just over 3.5 million people passed through ports of
entry in April based on Department of Home Affairs immigration
information, with foreign arrivals decreasing 6.9% to just short of
1.3 million. Departures decreased by 9.1% and transits by 4%.
With Easter falling in March last year and April this year, the
results for April alone look particularly bad, but are something of an
anomaly.
StatsSA says that cumulatively, from January to April, the number of
tourists from overseas countries decreased by 1.5% year-on-year.
Grant Thornton director Lee-Anne Bac says April’s stats were bad, but
should be treated with caution because of the shift in the Easter
holidays. The year-to-date figures for 2018 show that overseas
arrivals are down 1.5%, while arrivals from the rest of Africa are up
5%. Total tourist arrivals are up more than 3%. This is nothing to
crow about, but is certainly better than the April figures infer.
The water crisis is a big part of the problem, but there are other
issues, says Bac, citing global turmoil as well as security concerns
that we are not necessarily hearing about in SA, but which are
nevertheless there.
She says one of the biggest problems is that South Africa is not
sending a cohesive message to potential tourists: “Everyone, from our
politicians to the private sector, needs to be aware of what they are
doing and saying, and how this has an impact on tourism.”
With the water crisis, for example, the restrictions, panic and even
the term ‘Day zero’ had a big impact, she says. “It was all [intended]
to get locals to save water but the impact was much greater. As a
society, we need to be more conscious of the repercussions of what we do.”
Hotels are not faring well, she says, and while the growth in Airbnb
accommodation may have had some effect, the occupancy numbers,
combined with foreign arrivals data, are a reflection of reduced
demand rather than competitive pressure.
), hotel occupancies were 62.3% against 67% in 2017 overall. The
biggest problems are being experienced by five-star hotels, especially
in the Western Cape.
Occupancy at five-star hotels in Cape Town in April was 55.8% compared
to 69.4% last April, while average daily rates were R2 727 against R3
241 last year. Four-star hotels are also suffering, with occupancies
at 56% (67%) and average rates at R1 200 (R1 300).
Even taking the Easter shift into account, March figures, which should
have had an Easter boost, are not much better.
Five-star occupancies in March were 72% compared to 81% (with average
rates down to R3 261 from R3 387) and four-star 73% compared to 85%
March, with average rates only marginally down.
“The reduced occupancy has something to do with competition, both
alternative and new, but primarily reflects reduced demand and the
consequences of the water crisis.”
There is also a significant knock-on effect on many industries, from
small tour operators to restaurants, wholesale suppliers and the wine
and transport industries.
Tourists browse local crafts and souvenir goods for sale at a market
in the downtown district of Cape Town. Picture: Kevin Sutherland/Bloomberg
“There is a multiplier effect with tourism, which is so wide �` and it
has an effect on jobs,” says Bac.
She is unsure of the outlook but says that tourism is growing globally
and, while it goes through blips, it rebounds quickly. There is no
reason why we can’t turn things around, she says, but it will take
time. The effects of the water crisis in particular will take time to
work through, given the long booking cycle.
“The industry is working hard to fix problems, including visa issues,”
she adds. “It will pull through, and I am hopeful we are through the
worst of it.”
With tourism contributing 2.9% to GDP, according to StatsSA, getting
the numbers up is important. South Africa continues to attract the
most overseas visitors from the UK, US, Germany, France, Netherlands,
Australia, India, China, Canada and Brazil, with these countries
representing 72.9% of all overseas tourists.
Virtually all tourists from Africa came from the SADC region.

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