The tourism numbers are in and unfortunately they have not made for pleasant reading – for accommodation providers and the tourism industry as a whole.
According to the PwC report, growth in foreign visitors to South Africa dropped to 1.7% last year, down from the 2.4% gain in 2017 and the 12.8% increase in 2016, and while overall room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 7.4% last year, up from the 1.9% increase in 2017, room revenue growth in South Africa fell to only 0.5% – its smallest increase during the past six years. That makes for grim reading.
Clearly 2018 was a tough year for tourism, with a number of factors in play – none more so than the drought in the Western Cape – while the political climate, investments concerns, and safety and security all came into play for the general tourism offering. Airbnb (as I discussed in my previous blog) has also played its part and when you combine all these factors and it’s not hard to understand why the numbers have seen little – to no – growth over the past year.
The drought most certainly factored into the drop in foreign visitors, and while the rainfall in 2018 was far better, there is still a long way to go, both in terms of filling the dams and changing the narrative to ensure international audiences are receiving the correct information. There is still a negative perception abroad and the reality is that bookings for 2019 were lost when the drought was at its peak. It’s going to take some time for that to balance out.
Guest nights dipped 0.7% in 2018, principally reflecting a decline in visitors to Cape Town due to the drought, although Johannesburg and Durban also recorded modest declines. The number of available rooms also rose 2.3% in 2018, the largest increase during the past six years. This increase was the result of a full-year’s benefit of the 13 hotels that opened in 2017, while there were another eight hotels that opened in 2018.
It is also worth noting, of course, that it’s not all bad news for the accommodation sector.
In 2018, there was an increase in African visitors to SA, off-setting the drop in Europe and Asia-Pacific markets, while PwC as also predicted guest nights to stabilize in 2019 and to grow as tourist arrivals pick up.
It will be interesting to see if the more positive upswing in terms of the drought, growing accommodation sector and the proposed regulations on short-term rentals will have a positive effect on the industry. Best to watch this space.