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Tourism still under pressure

Aug 30 2012 14:28 Sapa

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Johannesburg - The tourism sector remained under pressure despite a slightly improved business climate compared to last year, said Tourism Minister Marthinus van Schalkwyk on Thursday.

"The post-recession consumer and trade landscape presents new challenges," he said at a meeting between the tourism industry and government in Pretoria.

"Today, value-conscious consumers are spoilt for choice."

With more online travel buying and trade consolidation, the tourism industry had to ensure it remained relevant.

In a more competitive international market, South Africa had to work harder to compete with big country brands such as the United States, Australia and India.

"Looking to 2020, we remain optimistic that moderate growth in international arrivals worldwide will persist," Van Schalkwyk said.

Markets would continue to shift, with some stagnating and others growing disproportionately. There were indications South Africa would continue to exceed international growth rates in 2012.

The global tourism sector's gross domestic product was expected to grow at 2.8% this year, down from 3% in 2011.

But by volume, global tourist arrival growth of 5.4% was recorded for the first four months of 2012.

This was expected to average out to between 3 - 4%

Tourist arrivals to South Africa had increased by an overall 10.5% year-on-year (y/y) during the first quarter, and overseas arrivals by nearly 18%.

Total income for the accommodation industry for the second quarter of 2012 increased by 11.2% y/y, and the number of stay unit nights sold for the same quarter increased by 8.2% y/y.

But the economic recovery in the US remained fragile, with second quarter growth down compared to the first quarter, and an ongoing crisis in Europe.

South Africa was committed to maintaining market share from these traditional markets.

Decisions to invest in emerging markets had paid off.

In the first quarter of 2012, Brazil recorded y/y growth of over 70% and India 23%, Van Schalkwyk said.

"A measure of our success would be if some of these new 'investment markets' were to grow into "core" markets in years to come," he said.

Although China's economy was slowing, a growth rate of 7.5% remained significant.

Because international tourism was a relatively new phenomenon for China, their double-digit outbound tourism growth continued to outstrip economic growth.

By 2020, China would have the third-largest outbound market in value, trailing the US and Germany, with 100 million outbound tourists.

But it had only 11 million outbound tourists in 2009.

"We cannot be starry-eyed about emerging markets," he said.

"We need to understand their needs even better.

The African market held massive potential for South Africa as SAA continued to expand flights in this region.

By 2030, half of all Africans would live in urban areas, with access to airports and other transport infrastructure.

The African urban population of 750 million would exceed the total number of city dwellers in the West.

Middle-class households on the continent already outnumbered those in major emerging markets such as India.

The industry's expansion into Africa was a healthy development, the minister said.

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marthinus van schalkwyk  |  china  |  india  |  germany  |  tourism
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