Travelling to South Africa

More tourists, but spending slows

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29 July 2008

While foreign arrivals to South Africa surged to a record of over nine-million arrivals in 2007, tourists spent less than those who visited the country in 2006, as the global economic slowdown began to take its toll on consumer spending.

A total of 9.07-million foreigners visited South Africa in 2007, representing an 8.3% increase over 2006, as the country broke its annual tourist arrivals record for the third year running - exceeding the global average of 6.6% and pushing the country from 29 to 28 in the global tourism rankings.

However, according to a Business Day article this week, revenue from foreigners dropped by some R6.5-billion, or 9.8%.

The paper reports South African Tourism CEO Moeketsi Mosola as saying that expenditure on accommodation decreased by some R800-million as visitors chose more affordable options like bed and breakfasts, self-catering accommodation and hostels.

"Where people can travel, they spend less while travelling or opt to go on holiday for shorter periods," Mosola told the publication, though he was cautiously optimistic that South Africa would achieve the 10-million foreign visitor mark by 2010.

Global economic slowdown

"Key developments over the past year include falling global gross domestic product (GDP), a dramatic rise in the fuel prices, and rising concerns for environmental sustainability and a reduction in carbon footprints," Pan-African Capital Holdings CEO Iraj Abedian told BuaNews.

Speaking this week at a roundtable discussion in Johannesburg on the changing economic environment, globally and domestically, and its effect on South Africa's tourism industry, Abedian said that changes in the global economy, with global GDP forecast to drop from 6.4% to below 4% this year, would effect long-haul travel the most.

"The dramatic rise in fuel costs has meant long-haul tourism is on the decline, particularly for middle income tourists, and domestically the same is true," said Abedian. "In South Africa, long-distance travelling will fall, but short-distance travelling is likely to be less effected."

Abedian told Business Day that the global slowdown was putting travel beyond the reach of more and more people, and that with key markets like the US, Europe and Japan close to recession, South Africa would have to compete fiercely with other destinations to attract visitors from those regions.

"The South African market must guard, at all costs, against pricing itself out of the global market as this destination now competes, on affordability levels, with destinations that are closer to home for European and US travellers," the publication reported him as saying.

Tourists going 'green'

Tourists were also becoming more and more environmentally conscious, and people would be willing to pay for establishments or companies that had a smaller carbon footprint.

"Sentiments [regarding environmental sustainability] are changing the fastest in countries that are vital as South Africa's tourist base," Abedian told BuaNews. "Tourism industries and services need to become more and more compliant, or else they will lose market share."

This would ultimately have an effect on companies' profitability in the short-term as expensive alternative energies were employed, he said, advising companies that were behind to catch up and those that were not behind to stay that way.

"The responsibility to move to environmental sustainability is not purely on the shoulders of government or business, but it will take a collaborative effort," Abedian said.

Sustainable job creation

The number of direct and indirect jobs created by the tourism sector over 2007 equated to 6.7% of total new jobs in the country, down from an all-time high of 7.8% in 2002.

Abedian pointed out that in 2002, the rand was at one of its weakest levels - making visiting the country a bargain for foreigners, while terrorist attacks in the USA and Europe had driven tourists to seek comparably safer destinations.

Tourism had matured as an industry in South Africa, he said, adding domestic tourism remained the largest contributor to the economic value of tourism in South Africa.

"As a sustainable source of permanent job creation, income generation and social integration, tourism has much to offer, however, its full potential is yet to be realised," he said.

SAinfo reporter and BuaNews



	Giraffe in the world-famous Kruger National Park. South Africa is one of the world's fastest growing travel destinations (Photo: Friedrich von Hörsten / South African Tourism)

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