The first quarter of 2023 has been positive for the tourism and hospitality sector, with increased visitors to South Africa and a welcome spike in foreign spending. We received just over two million visitors – which is up by 102.5% when compared with the same period in 2022. Although 21.5% lower than the 2019 visitor numbers, this clearly indicates we are moving in the right direction.
Tourist numbers have also increased month on month since the festive season peaks, improving significantly this quarter compared with the first quarter of last year. We welcomed 658 704 tourists in March, and in April, this figure rose to 713 470, with visitors from SADC countries accounting for the most arrivals (542 427) followed by overseas visitors coming in at 160 647.
This increase in tourists is further boosted by their spend of R25.3 billion (€1.2bn) in the first quarter, translating to a 143.9% increase during the same period in 2022 and edging closer to the R25.6 billion (€1.2bn) that was spent in January to March 2019. European tourists were the big spenders at R10.8 billion (€541m), followed by visitors from Africa at R9.3 billion (€465m).
It is also positive to see that visitors are staying longer – an average of 13 days, which beats the 11 days we had in 2019.
Looking at Q1 income from accommodation, this has increased by 49.9% compared with 2022, with hotels the main contributors. The number of bed nights has increased by a significant 124% compared with last year, but this figure remains lower than 2019 levels.
Context is king
While the month-on-month figures and comparisons to 2022 indicate a strong recovery for the first quarter, the data must be seen in context. The shadow of the almost 500 000 jobs lost during the first year of the pandemic still hangs over us, with the reminder that tourism once generated 740 000 direct jobs and more than 1.5 million indirect jobs.
Recovery, therefore, needs to be measured against pre-pandemic data to identify how to grow the industry quicker, while the overarching goal remains to bounce back fully and leverage an industry that is still the biggest driver of job creation and skills development in South Africa.
“The industry has certainly made strides in its efforts to recover from the impact of the COVID-19 pandemic,” Statistician-General Risenga Maluleke has said. “However, it is important to note that it has not yet fully regained the levels it had prior to the pandemic. The shock has been a reminder of tourism’s vital role as an economic and social force for change in the country.”
We are still lagging behind global tourism growth, as revealed in our joint survey with South African Tourism and we need to tackle why. Tourist arrivals last year were 44% below pre-pandemic levels, compared with the UN World Tourism Organization’s global average of 35%. Africa is in fact outpacing our recovery and East Africa, in particular, is booming.
Uganda is currently the region’s top destination and visitors increased by almost 89% last year. It appears a focus on regional tourism and emerging markets is working to East Africa’s advantage.
In South Africa, the escalating electricity crisis is having a massive impact on tourism and the profitability of our hospitality businesses. With daily loadshedding now a way of life, businesses that could afford it, have been forced to invest in generators. However, the high cost of diesel is impacting their financial viability.
The country also continues to grapple with several other challenges – water quality and shortages, safety and security, the lack of an optimised e-visa system and poor road infrastructure. Assuming our unique barriers are holding us back, it makes sense that by addressing them, we could attract more tourists. This in turn, would offer a solution to the unemployment rate, which at 32.9% remains the highest in the world.
Making a contribution
As a private-sector entity, we are doing everything possible to contribute. To this end, we recently launched our non-profit business incubator as an instrument of transformation, skills development, entrepreneur empowerment and job creation. Through this initiative, FEDHASA members may redirect a percentage of their enterprise development or supplier development investment spend to sponsor a set number of beneficiaries every financial year. The model is aimed at developing small, medium and micro enterprises that are at least 51% black owned, through individual, needs-based programmes.
In terms of loadshedding, FEDHASA is currently motivating for the diesel rebate to be extended to the hospitality industry. We are also hosting a series of events in the three major centres that bring together industry stakeholders from the public and private sectors. Called ‘Talking Energy with FEDHASA’ we provide practical advice on operating during loadshedding with alternative energy options.
However, more work in these areas is required, and more public-private collaborations. We need Government to address the issues blocking our recovery and expedite solutions. Indeed, Tourism Minister Patricia de Lille has said the time has come for implementation, not more plans. Her department has set a target of 21 million tourists and a contribution of 10% to the GDP by 2030, mandated by the National Development Plan.
We look forward to continuing working with her, as it is clear that we will need all hands on deck for the next seven years – and beyond.