Tourism income is on the steady road to recovery in South Africa after it took a beating amid the Covid-19 pandemic, albeit still at pre-Covid rates.
The latest tourism and migration figures published by Statistics South Africa yesterday showed income from the tourist accommodation industry grew by 67.1 percent year on year (y/y) in June. This following May’s 63.8 percent y/y (revised) lift.
The uptick was the result of a 43.1 percent increase in the number of stay unit nights sold and a 16.7 percent increase in the average income per stay unit night sold.
Lara Hodes, an economist at Investec, said the hotels segment of the market was largely responsible for the uptick, contributing 52.2 percent points, on the back of growth of 116.5 percent y/y.
“Notwithstanding, the robust pick-up in demand since the onset of the pandemic, occupancy rates, however, remain below pre-Covid levels, Hodes said.
According to the results of the latest UNWTO World Tourism Barometer, “international tourism saw a strong rebound in the first five months of 2022, with almost 250 million international arrivals recorded”. This versus just 77 million arrivals logged between January to May of 2021, suggesting that the sector had recovered almost half (46 percent) of pre-pandemic 2019 levels.
Hodes said while this was positive news for global tourism activity, risks remained. The pandemic triggered a large number of retrenchments, which had led to workforce constraints as demand has climbed. Moreover, heightened inflation, aggravated by the war in Ukraine, has increased the cost of travelling with jet fuel prices rising notably.
“This combined with a slowing global growth outlook, with the IMF (International Monetary Fund) dropping its GDP (gross domestic product) forecast for this year and next to 3.2 percent and 2.9 percent respectively, will weigh heavily on consumers, with travel viewed as a non-essential expense,“ she said.
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