Fedhasa urges caution as SA hits record tourist arrivals, says recovery still uneven

The Federated Hospitality Association of South Africa (Fedhasa) has struck a cautious note in response to President Cyril Ramaphosa’s announcement that international tourist arrivals reached a record 10 million in 2025, warning that headline figures do not necessarily reflect a full recovery in the hospitality sector.

In his weekly newsletter on Tuesday, Ramaphosa said South Africa had achieved a major milestone, with about 10.5 million international tourists visiting the country between January and December 2025 — the highest number on record and above pre-Covid-19 levels.

He described the achievement as a vote of confidence in South Africa as a global tourism destination and a sector with strong growth potential.

According to Ramaphosa, tourism plays a critical role in the economy, supporting an estimated 1.8 million direct and indirect jobs, with roughly one job created for every 13 international arrivals.

He added that the sector contributes close to 9% of South Africa’s gross domestic product, based on World Travel and Tourism Council estimates.

However, Fedhasa national chairperson Brett Tungay said the figures should be interpreted with caution.

While the overall arrival numbers are encouraging at face value, he said a significant share of these arrivals consists of travellers from neighbouring countries who cross borders for business, medical reasons or transit, rather than leisure tourism.

“A significant proportion of these arrivals are travellers from neighbouring countries, many of whom cross the border for reasons other than leisure tourism, such as business, medical visits, or transit," Tungay said.

"These individuals are often recorded as tourists, even if their economic impact on the hospitality sector is minimal." 

Tungay added that when looking specifically at arrivals through South Africa’s main international airports (Cape Town, Johannesburg, and Durban), the increase in bona fide international tourists is less dramatic, and many parts of the country still report foreign visitor numbers below pre-COVID levels.

“Meaningful growth in the tourism and hospitality sector depends on quality as much as quantity. Inflation of overall arrival figures does not always translate into actual business for hotels, restaurants, and attractions across South Africa.”

He said that much of the cross-border movement from neighbouring countries has a limited impact on the broader hospitality industry.

While areas such as the Western Cape and parts of Mpumalanga, including the Kruger region, have seen stronger recoveries, Tungay noted that much of the industry nationwide has yet to return to pre-Covid trading conditions.

The true indicators of recovery, he said, remain bookings, overnight stays and direct spending — metrics that are still uneven across the sector.

Despite these concerns, Tungay said there are positive signs of gradual improvement in international arrivals and expressed optimism for continued growth into 2026.

He cautioned, however, that South Africa continues to lag behind global competitors, many of whom have surpassed pre-pandemic tourism levels by between 15% and 30%.

"For South Africa to realise its full tourism potential, we need more effective destination marketing, greater policy stability, and leadership at SA Tourism that is attuned to industry realities," he said.

Supporting evidence of improvement has emerged from recent data.

Investec economist Lara Hodes said income from the tourist accommodation industry grew by 13.6% year-on-year in November, following a 15.3% increase in October.

Hotels, the largest accommodation category, accounted for 8.9 percentage points of November’s growth, while other accommodation types such as lodges, bed-and-breakfasts and self-catering establishments contributed a further 4.1%.

Hodes added that confidence amongst participants in the hospitality sector (which is included in the BER’s other services sector survey) lifted notably in the fourth quarter, climbing by a marked 23 points to 79.

“This is the highest reading in nearly twenty years, the BER noted,” she said.

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