The issue of loadshedding continues to plague the tourism sector, particularly impacting accommodation businesses, which reported subpar performance in the first half of 2023.
According to the latest Tourism Business Index (TBI) released on Thursday, the industry achieved a rating of 76.0 index points during the six months leading up to June.
To put this in perspective, normal business performance is calibrated to an index of 100, with values above indicating better-than-normal performance and those below indicating worse-than-normal performance.
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As per IOL, the TBI results were unveiled at the inauguration of the Tourism Leadership Conference 2023, hosted by the Tourism Business Council of South Africa (TBCSA).
80% of surveyed businesses pinpointed loadshedding as a critical issue significantly hampering their operations. Following closely behind were concerns about service delivery, safety and security, the socio-economic and political climate and air access.
TBCSA CEO Tshifhiwa Tshivhengwa attributed the below-average business performance primarily to the persistent energy crisis.
This challenge was compounded by sluggish economic growth and the rising cost of living. The key factors contributing to this notably subpar performance were the expenses related to alternative power sources such as diesel and generators, battery costs and increased operational overheads. Safety and security concerns further discourage demand in the industry.
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Tshivhengwa emphasised that the accommodation sector bore the brunt of these challenges, grappling with soaring input costs attributed to loadshedding and inflation. Unfortunately, the outlook for accommodation businesses in the next six months remained pessimistic, with concerns centred around the cost of alternative power supplies, safety and security, input expenses and a lack of overseas and domestic leisure demand.
Nevertheless, there is a glimmer of hope on the horizon for the remainder of 2023, as the industry anticipates a return to ‘normal’ performance, projected at 101 index points for the second half of the year.
Tshivhengwa drew encouragement from year-to-date data from Statistics South Africa, which revealed that foreign tourism arrivals had exceeded 2019 and even 2018 levels, primarily driven by the African market.
The lifting of COVID-19 restrictions, robust overseas leisure demand and enhanced operational efficiency were among the few positive factors contributing to the first-half performance of 2023.
Tshivhengwa remained optimistic about the industry’s future, expecting strong foreign arrivals to persist as positive sentiment returns. The industry is also looking forward to improved domestic demand in the latter half of 2023.
TBCSA has set an ambitious target of attracting 8.75 million foreign tourists in 2023, with the year-to-date number standing at 4.8 million foreign tourists by the end of July.
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Tourism minister Patricia de Lille highlighted the increasing number of direct flights returning from key markets like America, Brazil and China as a testament to South Africa’s continued appeal as a destination for both domestic and international travellers.
‘Our goal is to surpass pre-Covid arrival numbers and exceed 10 million arrivals by the end of March 2024, and the numbers thus far are encouraging as we gear up for a bumper summer season,’ said de Lille.
de Lille also noted the significant increase in spending by international arrivals, which amounted to R48 billion for the period from January to June 2023, compared to R21.5 billion during the same period in 2022.
To accelerate tourism recovery, especially in the overseas market, industry stakeholders stressed the need for substantial investments in destination marketing in key source markets and addressing concerns related to safety and security. They emphasised the urgency of developing a world-class e-visa system, which would streamline visa issuance and boost arrivals.
Home Affairs Minister Dr Aaron Motsoaledi revealed that efforts were underway to expand the e-visa system to cover other visa types, such as study, business travel and group travel. While acknowledging visa issuance backlogs, Motsoaledi noted the importance of ensuring that South Africa welcomes the right visitors while ensuring that ‘undesirable people do not enter the country.’
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