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Cape Town - The tourism businesses which feel more positive are those that have upped their marketing efforts to respond to prevailing conditions, according to Mmatšatši Ramawela, chief executive of the Tourism Business Council of South Africa (TBCSA).
This shows in the latest Tourism Business Index (TBI) compiled quarterly by Grant Thornton for the TBCSA and its partner First National Bank (FNB).
The 2013 third quarter results of the TBI were better than expected, reaching its highest performance since the survey began in late 2010.
“It’s really good to see that improved performance has increased confidence in the overall expectation for the last quarter of the year which, confirms the industry is feeling upbeat and expects operations to continue on a steady normal trend,” said Gillian Saunders, global leader of hospitality and tourism at Grant Thornton.
The survey splits into two sub-indices, namely accommodation and Other Tourism Businesses (tour and coach operators, vehicle rental, airlines, travel agents, retail outlets, forex traders, conference venues and attractions).
There was a very positive performance among respondents in car hire, airline, conference centres, and activities and attractions.
About a third of respondents in the accommodation sector put the third quarter's good business performance down to strong domestic business demand, while 45% of respondents in the Other Tourism Sector cited the weak exchange rate.
About half of the Other Tourism Sector expect the weak exchange rate to have a positive impact on business performance in the fourth quarter of 2013, while only 30% of the businesses in the accommodation sector expect this.
Other indexes
When compared to other business confidence indices, the latest TBI shows that tourism businesses are bucking generally negative business confidence.
Both the Sacci Business Confidence Index and the RMB/BER Business Confidence Index, showed a decline in their last reporting periods.
“Even though the methodologies are different, it would appear that there is a general downward tendency in business performance, which is not indicated by the TBI,” explained Saunders.
“The majority of respondents in both sectors still say that their employment levels will remain unchanged," said Ramawela.
"Although overall employment growth in the sector appears muted, we take comfort in the noting that employment levels are not expected to fall in the next quarter. A positive development considering the economic growth concerns raised by Finance Minister Pravin Gordhan in his mini budget”, Ramawela said.
Cost of inputs remains one of the most cited negative contributing factors for both accommodation (50%) and other tourism businesses (31%), as it has been for the last five consecutive quarters.
Other tourism businesses cited competitor market behaviour as the most negative factor (36%).
In line with predictions in the last edition, the accommodation sector expects negative impacting factors for the fourth quarter to be cost of inputs (49%), insufficient domestic leisure demand (33%) and insufficient overseas leisure demand (28%).
When looking at next year, accommodation respondents expressed, on balance, a negative outlook, which continues the pessimistic expectation shown in the prior edition.
- Fin24
This shows in the latest Tourism Business Index (TBI) compiled quarterly by Grant Thornton for the TBCSA and its partner First National Bank (FNB).
The 2013 third quarter results of the TBI were better than expected, reaching its highest performance since the survey began in late 2010.
“It’s really good to see that improved performance has increased confidence in the overall expectation for the last quarter of the year which, confirms the industry is feeling upbeat and expects operations to continue on a steady normal trend,” said Gillian Saunders, global leader of hospitality and tourism at Grant Thornton.
The survey splits into two sub-indices, namely accommodation and Other Tourism Businesses (tour and coach operators, vehicle rental, airlines, travel agents, retail outlets, forex traders, conference venues and attractions).
There was a very positive performance among respondents in car hire, airline, conference centres, and activities and attractions.
About a third of respondents in the accommodation sector put the third quarter's good business performance down to strong domestic business demand, while 45% of respondents in the Other Tourism Sector cited the weak exchange rate.
About half of the Other Tourism Sector expect the weak exchange rate to have a positive impact on business performance in the fourth quarter of 2013, while only 30% of the businesses in the accommodation sector expect this.
Other indexes
When compared to other business confidence indices, the latest TBI shows that tourism businesses are bucking generally negative business confidence.
Both the Sacci Business Confidence Index and the RMB/BER Business Confidence Index, showed a decline in their last reporting periods.
“Even though the methodologies are different, it would appear that there is a general downward tendency in business performance, which is not indicated by the TBI,” explained Saunders.
“The majority of respondents in both sectors still say that their employment levels will remain unchanged," said Ramawela.
"Although overall employment growth in the sector appears muted, we take comfort in the noting that employment levels are not expected to fall in the next quarter. A positive development considering the economic growth concerns raised by Finance Minister Pravin Gordhan in his mini budget”, Ramawela said.
Cost of inputs remains one of the most cited negative contributing factors for both accommodation (50%) and other tourism businesses (31%), as it has been for the last five consecutive quarters.
Other tourism businesses cited competitor market behaviour as the most negative factor (36%).
In line with predictions in the last edition, the accommodation sector expects negative impacting factors for the fourth quarter to be cost of inputs (49%), insufficient domestic leisure demand (33%) and insufficient overseas leisure demand (28%).
When looking at next year, accommodation respondents expressed, on balance, a negative outlook, which continues the pessimistic expectation shown in the prior edition.
- Fin24
