Lack of demand, a strong rand and rising prices are putting strain on the tourism industry, according to a tourism business index (TBI) released on Wednesday.
“Business in the travel and tourism sector continued to operate under heavy strain in the second quarter of 2011,” said the Tourism Business Council of South Africa (TBCSA) on the results for the TBCSA FNB tourism business index.
The tourism business index performance index was 74.5 against a normal of 100 for the second quarter of 2011.
“When compared to the expected industry performance index of 94.1 for the second quarter, the industry performed significantly worse than expected and somewhat worse than in the first quarter of the year.”
The index gives an indication of the current and likely future performance of various businesses in the South African travel and tourism sector.
“The latest TBI results are certainly a confirmation of what we are witnessing on the ground,” said Mmatsatsi Marobe, chief executive officer of the TBCSA.
The industry was finding business difficult because of insufficient overseas arrivals, insufficient domestic leisure and business demand, the strong currency and the rising cost of inputs.
Other negative factors mentioned by respondents were changing travel patterns, high fuel prices, and the many public holidays that failed to deliver the expected travel spend on domestic travel.
The TBCSA will hold its annual general meeting in August to take stock of where the industry finds itself and decide how to get back on track. — Sapa