South Africa’s tourism sector has recorded a decline in business performance for the first half of 2018. This is according to the Tourism Business Index (TBI) report released by the Tourism Business Council of South Africa (TBCSA).
According to the report, business performance in the sector has declined since January and has been recorded as lower than normal. Against an index of 100, the sector has recorded 57.9, much lower than the 72.4 forecast. At the same time last year, the TBI was 71.4.
Tshifiwa Tshivhengwa, interim TBCSA CEO said: “If one goes through the report, you will note both the ‘accommodation’ segment and ‘other tourism businesses’ indicate well-below-normal levels of business performance.”
The forecast for the accommodation sector was 66.2, but it has been reported at 57.6. Other tourism businesses (which include tour operators, coach operators, vehicle rentals, airlines, travel agents, retail outlets, forex traders, conference venues and attractions) recorded an index score of 58.2, well below the 77.1 projection.
According to the TBCSA, possible reasons behind this decline could be insufficient international leisure demand as well as a decline in domestic travel. Other factors have been reported as the water crisis in Cape Town, transport licensing issues, fuel increases, political uncertainty and volatility, crime and ongoing protest action.
When focusing on a decline in demand from the international market, the TBCSA says this is in line with Statistics SA’s reports on tourism arrivals. Tshivhengwa says: “If one only looks at the latest Tourism and Migration report for the month of June, it shows a decline of 1.28% in overseas arrivals and just over 2% decline year-to-date. In addition, what is most concerning is the decline in growth from China and India. The Indian market grew 20% per annum from 2008 to 2012 and we are now going backwards.”
Tshivhengwa believes the industry needs to take action against the barriers holding back growth: “We need to stop talking about self-imposed barriers and move to action on issues such as easing visa requirements, do away with complex unabridged birth certificate measures and the intractable issues around tourist vehicle permitting, to mention a few.”
The performance for the second half of 2018 is anticipated at a slightly higher score of 59.2, still lower than what had been anticipated for January to June 2018. This is also the lowest score anticipated since 2011.
