South Africa saw 3.8 million tourists from January to May 2024 and while it is heartening to see that tourism is recovering, this number is 561 000 less than the number of tourists who visited the country in the first five months of 2019.
According to BDO South Africa’s director Lee-Anne Bac, with the sector not progressing according to plan, it is at risk of not achieving a full rebound by the end of 2024 and the country still has a lot of work to do get the industry back on its feet.
With more than half the year gone by, Bac shares insights into key trends the sector is witnessing, as well as the implication of these trends for tourism in South Africa.
A slow start for foreign tourism
Bac highlighted that overseas tourism, often touted as the crown jewel when it comes to economic impact due to the high average spend per visitor, is lagging significantly behind 2018 and 2019 numbers.
She said that with 930 000 overseas arrivals between January and May 2024 year to date (YTD), the lag behind 2019 overseas arrivals for the same period is at 15% and 17% behind 2018 numbers.
“Compared to 2023 when YTD growth over 2022 overseas numbers was 80%, growth for the first 5 months of 2024 has been disappointing at only 8% and should be at least 30% or more if we are to reach 2019 numbers by the end of 2024.
“This means we failed to regain 194 000 overseas tourists resulting in a loss to date of R4.8 billion in direct revenue, excluding the multiplier effect of this direct spend in our economy,” said Bac.
African tourism is improving – in pockets
The expert said that when it comes to African tourism, while the country is seeing an improvement, numbers are still lagging 12% behind 2019 and 13% behind 2018 arrivals for the first 5 months of the year, meaning a loss of R3 billion in direct revenue.
However, compared to 2023, growth for the first 5 months of 2024 has been 10%, but growth of 25% is needed to bring us back in line with 2019.
“On a positive note and a point in support of visa openness, the number of tourists from Ghana was more than 50% behind 2019 levels in 2023, until the mutual removal of visas, from which point arrivals have far exceeded 2019 numbers. Kenya is another good news story.
“Arrivals are 45% above 2019 figures and in 2023 arrivals were 34% more than 2019,” said the expert.
What hotels are tourists choosing?
Bac noted that hotel occupancy and achieved average room rates have shown 5-star hotels are the star performers. She said overall, occupancies and average rates for January to May 2024 are more than back-on-track when compared to 2019.
“For the first 5 months of 2024, South African 4-star hotels have shown improved performance, achieving an average occupancy that is only 1 percentage point below the same period in 2019 but achieving real growth in average room rate of 7% over 2019,” said Bac.
She further noted that unfortunately, 3-star hotels have yet to get out of the starting blocks with average occupancy tracking 2- percentage points behind the first five months of 2019 and a real decline in average room rate of -2%.
Implications for tourism moving forward
The expert said that certain markets have rebounded well, but on the whole South Africa’s tourism industry is lagging.
She highlighted that the Russian market for example has shown a 73% increase in the number of visitors received compared to the same period in 2019, and the number of visitors from the Netherlands has already recovered beyond 2019 levels.
Bac said that country must keep doing more across the board as a sector to promote growth in global markets who hold untapped potential for increasing travel and tourism numbers.
“Obtaining visas with as little bureaucratic red tape as possible is crucial. We can already see what the visa free environment is doing for African tourism numbers. Improved air access through joint public private sector interventions will also drive increased tourism to many regions.
“And, of course, the largest elephant in the room is the need to tackle crime, grime and decay in our cities across the country,” said Bac.
She added that local government must take a firm stand and be accountable for cleaning up public spaces to ensure they are not only safe, but also appealing for tourists to visit.
“Despite the slow recovery, there is a palpable sense of optimism within the sector, and with good reason. But the sector needs to up its game if we hope to achieve a full rebound by the end of 2024.
“The stage is already set thanks to our unmatched natural attractions and world-class tourism services and facilities, we simply need to work harder to not only reach our audience but give them an experience fully deserving of a standing ovation,” she said.