30 January 2013
South Africa’s tourism industry is showing signs of a return to “business as usual”, or slightly better than usual, following a couple of very tough years, judging by the latest Tourism Business Index from the Tourism Business Council of South Africa (TBCSA) and FNB.
According to consultancy Grant Thornton, who compile the index, the results for the last quarter of 2012 “confirm a return to normal trading levels and an overall positive outlook for the travel and tourism sector in 2013”.
The index came in at 104.6 for the fourth quarter, up on 101.1 in the third quarter – a huge improvement on the 87.3 scored in the fourth quarter of 2011. The forecast for the first quarter of 2013 is 102.4. A score of 100 is considered normal.
Speaking at the release of the index in Johannesburg last week, TBCSA board chairman Mavuso Msimang said performance levels above the norm for two quarters running was “a clear indication of the extent to which business is recovering from the recessionary impacts and excess of supply it suffered post the 2010 Soccer World Cup”.
The sector’s resilience and ongoing long-term potential shows through in the business and investor confidence for capacity and employment increases, according to Grant Thornton.
However, in spite of the return to regular trading levels and the positive outlook, a number of factors remain a concern.
“Global economic uncertainty and ongoing recession risk, coupled with the negative profiling of South Africa internationally through labour and community unrest, weighs heavily as a constraint for the sector,” said Gillian Saunders, Grant Thornton’s head of advisory services.
“Input cost increases from rates, electricity and fuel costs were also cited as negative factors affecting business performance,” she added.
Wiza Nyondo, FNB’s head of tourism, said the results showde that “the market has begun to recognise South Africa as a sought after destination.
“Although we’ve seen some instability, we still believe in South Africa’s diverse offering of services and products where industry professionals can partner to help transform our country,” Nyondo said.
According to the survey, the majority of accommodation sector respondents expect domestic business markets to offer the best potential growth for 2013, followed by foreign leisure and then domestic leisure. Other tourism businesses expect growth to come from foreign leisure markets, followed by domestic markets.