Tourism prospects on the up and up

Tourism remains a key component of the South African economy. (Supplied)

Tourism remains a key component of the South African economy. (Supplied)

The sector contributed an estimated 8.6% (R251-billion) to the country's gross domestic product in 2011 and is expected to grow at 4% for the next decade, which make it obvious why the Industrial Development Corporation's tourism unit is obsessed with ensuring the country remains attractive.

The sector is also an important employer, providing an estimated 513 000 direct jobs and almost 1.2-million indirect jobs, and has been identified in government's economic strategies as one of the sectors that has the potential to create significant employment.

"We probably won't be seeing an immediate return to the pre-recession stellar run, but conditions are visibly improving and the medium-term outlook is encouraging," says Jorge Maia, head of research and information at the IDC.

"Tourism has the potential to catalyse economic growth and create much-needed jobs. However, industry stakeholders need to start planning well ahead of the anticipated rebound."

SA Tourism's first quarter Tourism Index report showed double-digit year-on-year growth from these traditional markets, with overall tourist arrivals climbing 10.5% over last year.

The highest growth was from Asia and Australasia (up 34.3%), followed by the Americas (up 24.5%). African air traveller numbers grew by 18.5% and European travel numbers by 11.9%.
African land travel markets grew by 7.4%. The report indicates that leisure (59.2%) remains the primary reason for tourists visiting South Africa in the first quarter.

"The potential for a rebound is massive," says the head of the IDC's tourism special business unit, Christine Engelbrecht. "Local infrastructure rates highly in the global stakes. Consequently, all that local entrepreneurs need to do is to adopt a competitive pricing regime that competes favourably on the global stage.

<strong>Growth momentum</strong>
"There is also an acute need for the local industry to shift focus from their current debt-laden Eurozone clientele that for long have sustained the growth momentum of the local industry to targeting potential tourists spread across the Middle East and the Asian market, notably China and India."

She adds that the often overlooked local middle class market is ignored at tourism operators' peril and represents huge untapped potential.

The SA Tourism quarterly report shows quite a significant increase in the number of domestic tourism trips and bed nights (the number of nights a bed in a hotel or similar establishment is filled): domestic trips grew by almost 15% to 6.5-million and total bed nights increased to 27.1-million.

This potential in the domestic tourism market is one of the reasons why the tourism business unit has turned its attention to developing niche projects that will have local and international appeal. The state lender's developmental agenda is also addressed through these projects that focus strongly on community ownership and involvement.

The distinct change in the profile of international &ndash; including African &ndash; visitors is another area of opportunity that should not be ignored.

There has been a steady inflow of visitors from fellow Brics (Brazil, Russia, India, China and South Africa) countries, for example, although it is unclear how much of this can be contributed to South Africa's admission to the economic grouping.

<strong>Growth potential</strong>
SA Tourism figures show that last year, the number of visitors from India and China grew by 26.2% and 24.3% respectively. In the first quarter of this year visitors from China grew a staggering 67.7% over the same period last year. India maintained a steady stream of visitors, with numbers growing by 23.1% in the first quarter. The purpose of their visit is split fairly evenly between leisure and business for Chinese visitors, while up to 75% of Indian visitors are here on business.

Brazil presents another market with tremendous growth potential and recorded an increase in visitors of almost 72% in the first quarter of this year, the majority of them on holiday travel.

The potential the tourism business unit sees in these figures, says Engelbrecht, is that new visitors who may have different tourism needs and desires are arriving and tourism operators should not be blind to this opportunity.

"The trend in the last few years was business hotels and ecotourism, but I think that market is quite saturated now. So tourism operators need to refocus and reinvent themselves. We need to be developing new markets, such as those from and to South America, but the difficulty is for the current offerings to suit the needs of those visitors," says Engelbrecht.

She adds that this may not require a 180-degree turnabout, but the accommodation establishments would do well to develop packages of activities or attractions in the immediate vicinity that would cater to such needs. By doing so, they could also motivate guests to lengthen their stay rather than simply overnighting.

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