Tourism remains a key component of the South African economy.
Tourism is key to South Africa’s economy, contributing R425-billion (or 8%) to South Africa’s gross domestic product in 2019. The industry provides 1.5-million direct and indirect jobs, more than the individual contributions of the agriculture, automotive, chemical and mining industries.
For six months now, the tourism industry has been at a standstill, with hotels closed and flights grounded. Reports from June 2020 indicate the industry lost R68-billion (54%) in revenue since the beginning of lockdown. In June 2020, the Tourism Business Council of South Africa reported that more than 600 000 tourism employees had applied for the Unemployment Insurance Fund Temporary Relief Scheme between April and June.
Reopening of international borders
As countries gradually lift restrictions, many destinations are beginning to reopen borders to reboot their struggling visitor economies. President Cyril Ramaphosa announced that the country’s borders would reopen to business travellers and tourists on 1 October. This is a welcome relief to the industry but it will be a long journey before it is restored to its original form.
It is anticipated that only visitors from countries with low infection rates will be allowed to travel into the country. Arrivals will be required to provide a recent negative Covid-19 test result or be quarantined on arrival. Tourism Minister Mmamoloko Kubayi-Ngubane said South Africa will use World Health Organisation guidelines to determine which countries to allow entry when international travel resumes.
The tourism industry has been operating safely during the lockdown, providing quarantine sites and isolation spaces to the government. It is expected to continue applying the same protocols serving business and leisure travellers. Health and safety will be a priority for tourists.
SA Tourism CEO Sisa Ntshona said despite borders reopening, it would take the sector two-and-a-half years to recover to 2019 economic levels. This contrasts with the industry perception that the reopening of the borders will result in a sudden flurry of activity and recovery.
Growth and recovery will come, though over a longer period (closer to five years) than the industry anticipates. Industry growth will be driven by the development of new products and packages, improved marketing, the introduction of preferential pricing systems for the domestic segment, and the further development of digital platforms to allow for contactless transacting.
The decline in international tourism could contribute to more being invested into developing products and packages that cater to the domestic market. The Tourism Business Council South Africa (TBCSA) introduced a tourism promotion campaign aimed at introducing quality products and service packages at reasonable prices to the domestic market.
The TBCSA also launched a tourism and hospitality industry application, the Opus4business app, which will allow travellers to identify businesses that have adopted world class health and hygiene protocols for safe travel.
As in countries such as Australia and Germany, domestic tourism could become the main pillar for South Africa’s tourism industry resurgence. The government is looking at introducing a two-tier pricing system. Domestic tourists will thus have an opportunity to enjoy the wonders of South Africa at a discounted citizens’ rate.
This local focus will enable niche markets to emerge, such as heritage tourism and festivals, local events (to address seasonality and geographic spread) and school and sports tourism. Leveraging community-led savings clubs and stokvels could stimulate group travel, community beneficiation and further entrench a culture of tourism among South Africans.
Since the relaxation of the lockdown to level 2 in August 2020, not much has been done nationally to ramp up advertising efforts to lure local citizens through special domestic tourism offers. This may be the result of budget cuts made to the tourism marketing fund at the beginning of the lockdown in March 2020. The funds were redirected towards strengthening the healthcare system to reduce the spread of the virus.
A Cape Town Tourism survey of 5 485 South Africans in June 2020 revealed that only 24% of respondents had disposable income, with most planning to use this money on necessities, and only 5% planning on spending money on leisure travel in the near future. More needs to be done on a national scale to ensure a high domestic uptake of tourism products across all provinces.
Local community inclusion
The tourism industry needs to ensure it leads with the value it brings to the table – be it a product, service, or experience. Enhancing the role played by small businesses in townships, rural communities, women, youth, and other individuals in the development of the industry will result in the rebuilding of a more inclusive tourism industry that warrants local support and fosters goodwill.
Tourism industry participants should be mindful of evolving customer preferences. For example, many tourists may prefer to spend time outdoors in nature, away from crowded spaces, with others preferring day trips and guest house stays instead of hotels. Leaning on local communities to develop products for these preferences will result in long-term benefit for the industry participants and for the local communities from a revenue and community development standpoint.
Our tourism industry should be driven by the concerns and expectations of tourists, with safety at the forefront. This will provide South Africa with an opportunity to rethink tourism for the future. Staying ahead of the digital curve, local community inclusion in industry development and promoting domestic tourism will be critical to the industry’s recovery.