According to Lee-Anne Bac, director of advisory services at BDO South Africa, the country’s tourism sector is showing signs of recovery with foreign tourism beginning to bounce back to pre-Covid levels.
Bac revealed that 3.7 million visitors passed through South Africa’s borders in the first four months of 2023, surpassing the numbers for that same period during our best year for tourism, 2018.
“In 2021, South Africa welcomed 2.6 million visitors into the country. Compared to the 10.47 million who came in 2018, this number reflected the sharp decline in tourist arrivals due to the pandemic.
“However, as travel starts to return and countries ease their restrictions, South Africa is finally starting to see a promising return to those pre-Covid numbers,” said Bac.
Bac said the rise in numbers can be attributed to intra-Africa travel, as most visitors to South Africa were from the continent.
“So far this year, arrivals from African tourists have exceeded their numbers from 2019 by 9%. This reflects the fact that this group has experienced a faster recovery compared to overseas tourists, and while they may not be high spenders, Africans continue to play a vital role in driving the overall recovery of our tourism industry,” said Bac.
She said that while some of these visitors may not be considered leisure tourists, the numbers for the first four months of 2023 sits at 89% of the 2019 levels, indicating a strong resurgence.
When it comes to overseas visitors, unfortunately the same can’t be said, noted Bac.
“This side of the tourism sector continues to lag behind, with only 774 000 arrivals in the first four months of 2023, which is still 17% behind the same period in 2019.
“Several factors contribute to the slow return of overseas tourists, including insufficient affordable flights to South Africa, increased competition from other more affordable destinations, a rise in intra-European travel, and concerns about safety, security, and negative perceptions of South Africa related to load shedding and other infrastructure issues.
“The slow reopening of borders in China and other APAC countries has also affected the overseas market,” she said.
Bac also revealed that among those visiting from overseas, the Russian market tops the list in terms of growth, with a 79% increase in visitors compared to 2019 and although this still remains a small percentage of overall visitors, it reflects a pattern seen across Africa likely due to the continent’s largely neutral stance in the Russian/Ukraine war.
On the positive side, 5-star hotels have shown positive growth in occupancies and average room rates, with some markets even surpassing 2019 levels.
“Cape Town's 5-star hotels in particular have performed exceptionally well, achieving nearly 6% growth in average room rates compared to the same period in 2019,” she said.
However, 3-star hotels are struggling, with low occupancies and rates persisting since the pandemic. Sandton’s 4-star properties have experienced a significant decline in occupancy and average room rates, resulting in a real decline in Revenue per Available Room (RevPAR).
“The slow recovery of the domestic business travel market, budget cuts affecting government employees’ travel, and lower overseas tourist numbers have contributed to the challenges faced by 3-star and 4-star hotels, particularly in Sandton and KwaZulu-Natal.
“The weak and under-performing economy has also led to cost-cutting measures, impacting corporate travel budgets. Additionally, middle-class travellers, who typically choose 3- and 4-star accommodations, are yet to return in significant numbers,” she said.
Bac noted that moving forward, the performance of the country’s tourism sector will remain closely tied to factors such as affordable flights, competition from other destinations, safety perceptions, and the reopening of borders in key source markets.
“In the meantime, the industry will be well placed to continue attracting tourists from African countries and exploring untapped markets such as China to ensure sustained growth and recovery,” she said.