Tourism recovery on track

In December, the number of overseas travellers visiting South Africa jumped to its highest level since February 2020 (which was just before the onset of the Covid pandemic and initial harsh lockdown regulations).

A total of more than 190,000 visitors from abroad spent some summer holiday time in South Africa in December - 30,000 more than the previous month and almost four times more than in December 2021.

Due to the debilitating effect on tourism of the lockdown regulations, an objective assessment of the extent of recovery requires a comparison with the same month in the pre-Covid era. Compared to December 2019, overseas tourism has now recorded a recovery rate of 74%, reflecting some welcome upward momentum from the average rate of recovery of just above 60% that persisted between July and November.

During 2022, the UK maintained its number one position as South Africa’s most important source of foreign tourists, but the strongest gain was made by the US, which has consolidated its number two ranking (above Germany) and is gaining ground on the UK.

Compared to total arrivals in 2017, the US also boasts the highest recovery rate, namely 71%. China’s zero-Covid policies have been reflected in a dramatic decline in tourist arrivals to South Africa, representing less than one percent of total overseas arrivals.

One concern over the composition of foreign tourist arrivals in South Africa is the narrow base, with 75% of all foreign tourists originating from only ten countries. It is quite evident that much more needs to be done by South Africa’s overseas representatives to market the country’s magnificent tourist attractions and accommodation facilities.

The recovery of accommodation income from the hospitality industry is also impressive, with hotels having increased this source of income by 56% in November 2022 (year-on-year). The group for guest houses, B&B and self-catering establishments have performed even better, with a year-on-year recovery rate of 83% in November.

Prior to the Covid pandemic, hotels accounted for around two-thirds of total accommodation income, with the group representing smaller establishments accounting for one-third of accommodation revenues. During and immediately after Covid, however, a role reversal took place, with the latter group moving up to around 60% of total accommodation revenue and hotels dropping to marginally more than a third.

The second half of 2022 consolidated the recovery of the hotel sector’s share, with the two groups of establishments now enjoying parity with regard to accommodation income and each group breaching the revenue mark of one billion rand during the fourth quarter.

With many South African households facing tough financial conditions as a result of higher inflation and interest rates, a drop in outbound overseas travel is on the cards, but domestic tourism is likely to continue on its recovery path.