Fuel hikes are increasing pressure on tourism pricing but industry leaders say the impact is likely to be uneven with some sectors far more exposed than others.
Speaking during a recent SATSA webinar on navigating travel disruptions, Faith Johnson, CEO of New Frontiers, said fuel levies and surcharges are an important long-term issue.
“We need to look at fuel levies, surcharges, how we pass those on to the consumer and how we manage expectations going forward,” said Johnson.
David Ryan, Founder and Owner of Rhino Africa, said the current pressure is more administrative than demand-driven.
“We know that there’s going to be complexity around fuel surcharges and increases in prices that increase logistics across the board,” he said. “Bookings 216 days out mean you have to make a whole lot of adjustments but we’ve had to do it many times before. It becomes an operational burden across hundreds of bookings rather than a fear of a loss in demand.”
Ryan said the impact will not be evenly felt. “As we’ve seen in the past, the smaller operators or lower basket-price operators, for example transfers, will definitely have to adjust their pricing,” he said. “When you get into the lodges, I’m not sure you’ll see as big an adjustment – perhaps on new bookings – because they are better equipped to absorb them.”
Some sectors are likely to face more immediate pricing pressure than others, particularly those tied directly to fuel-intensive operations, he added.
“In your transfers, you’re going to see those increases and in smaller aircraft hops,” Ryan said. “Lodges: I’m not so sure it will impact the cost of running a game drive to the same extent.”
Johnson said tight-margin products would be the most vulnerable but noted there could be some cushioning effects elsewhere in the system.
“It’s going to be those products that have particularly tight margins that can’t absorb an impact like this,” she said.
Johnson also pointed to currency dynamics. A stronger rand against the dollar has complicated forecasting but could provide some relief in certain areas, particularly as 2027 rates are still being finalised.
“So perhaps there is some cushioning,” she said. “A lot will be determined by how long this goes on for.”
Johnson argued that South Africa still has room to defend its value positioning, at least on the ground product side.
“The idea of positioning South Africa as an affordable destination is very top of mind,” she said. “It doesn’t talk to air pricing but, definitely in terms of ground arrangements, we still have a lot of scope to position as a very affordable destination. I don’t think we’re outpricing ourselves at this stage.”
Ryan agrees that higher prices will not necessarily stick once stability returns. “Prices will adjust when stability returns to the market.”
