Higher than anticipated business performance in South Africa was recorded in the last quarter of 2016, the Tourism Business Index revealed. Against a normal performance score of 100, the industry recorded an index of 104.5 – higher than the anticipated 81.7.

Although, performance in the last quarter was the best for 2016, overall performance for the year was slightly below 2015. There has been a decline seen since 2013 when the average for the year was just below 110.

“We welcome the general improvement in business performance over this period,” said Mmatšatši Ramawela, TBCSA CEO. “However, indications of a steady decline in performance over the past three years are a cause for concern”. 

Gillian Saunders, Deputy CEO and Head of Advisory Services at Grant Thornton, believes a decrease in domestic leisure demand is likely the main reason for the decline in the accommodation index. “Almost a quarter of accommodation respondents and more than a third of other business respondents cited insufficient domestic leisure demand as a negative constraint on performance.”

On a positive note, strong overseas leisure demand was cited in the accommodation index as a positive contributing factor. However, this was not significant enough to lift up the overall performance for both accommodation and ‘other tourism businesses’ segments.

Looking ahead into the first quarter for 2017, expectations remain low at an index of 96.0. Performance for the accommodation segment is expected to remain fairly flat, while the ‘other tourism businesses’ segment looks forward to a continued positive run.

Ramawela added that industry was looking forward to a less turbulent year. “There is no doubt that the major political and socio-economic developments that we saw unfold in 2016 will spill over to 2017.  However, we remain cautiously optimistic that travel and tourism will roll with the punches and that overall improvement in business performance will rise even further in the coming months.”

The TBI is published by the TBCSA in partnership with Grant Thornton.