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Cape Town - The South African tourism industry is still struggling under the weight of the strong rand, with inbound tourist spending much reduced, according to Tourvest's Tommy Edmond.
This is the case, even despite steady to somewhat higher visitor volumes.
Writing in the company's newsletter on Wednesday, Edmond said that conditions had not improved for Tourvest since the end of the company's half-year at December 25, 2004, when the company reported a fall in revenue to R800.8m from R825.6m the previous year.
According to Edmond, the problem was the much-reduced rand spend by tourists, which was attributable firstly to the stronger exchange rate and secondly to a significant shift in South Africa's tourism mix.
The proportion of high-spending Europeans is falling and the number of Chinese package-tour tourists - with tight budgets - is rising.
Meanwhile, Edmond noted, Tourvest's inbound tourism services division did not have the right mix for the current market, as it was too heavily orientated towards Europe in general and Germany in particular.
While it was also strong in Asia, the Chinese were delivering volume but not money.
The division's sales teams were hard at work developing new markets, particularly in North America, he said, but it would be 18 months before these efforts would show significant results.
In the company's outbound travel services division, TRT had continued to post market share gains, but also reflected the general industry trend of higher volumes and lower revenues resulting from discounted fares.
A major area of management focus was improving the IT platform due to the continuing growth of online reservations, he revealed.
Commenting on the recent move by South African Airways (SAA) and other airlines to phase out the payment of commissions to travel agencies, Edmond said this would oblige agencies to charges fees for services that were previously provided free or at a nominal rate.
The new regime would not have a negative impact on TRT, he stated, as it already largely operated on a zero-commission platform since the bulk of its corporate business was done on a
negotiated fee basis.
However, the fundamental shift in the industry's remuneration basis now underway could put revenue and cash flow pressure on smaller travel agencies, he believed, which could lead to a round of consolidation in the industry.