Some years ago, I wrote a series of articles about what it felt like to be a northerner living below the Equator and, in effect, at least in geographic terms, being ‘Upside Down’.

Following 40-plus years living in the ‘wrong’ hemisphere, I feel quite at home, but now the world feels upside down for other reasons.

Just as it seemed that we had come through the major travails associated with COVID-19, and we looked set for a brighter future, Vladimir Putin decided to send a Russian army into Ukraine without invading it, and proceeded to bomb and shell its towns and cities without waging war on it!

As Jim Morrison would have said – Strange Days, and it does throw some of the opinions that were shared in a recent column in Tourism Update entitled – Where to from here? – into sharper relief.

The first change is that no one on that panel had calculated a spiralling oil price into their thinking – and why would they?

From both a golf and broader tourism perspective what could this mean?

History shows that we have been here before, and with barrel prices hitting $129, albeit briefly, in early March, a level that passed the previous record in 2008 of near $128 per barrel, the immediate inflationary effect on every layer of every aspect of life will soon be felt.

Already the travel industry is anticipating higher airfares, and the knock-on effect will not be limited to this, and will soon be felt across every service in every sector.

The other concern is that the capacity to absorb any of the increases, by the various levels of service providers, has been decimated by the belt tightening required while the pandemic was at its height.

Higher prices across the board?

This will leave little wriggle room, and consumers might soon be paying higher prices across the board.

The almost immediate impact of a fuel price increase, is that the average consumer’s disposable income comes under further pressure.

Already several friends have revised their overseas travel plans to vacation closer to home and avoid the expense of airfares and car hire.

‘Staying home’ could be an eerie repeat, albeit because of high fuel prices as opposed government edict, to our own travel-related version of Groundhog Day (!), where during the major lockdowns we could not travel anyway and when I was getting two months to the litre out of my old Mercedes!

While most of this will not be an issue for the higher end of the tourism sector, it will affect the average household.

The longer-distance local traveller will not necessarily escape unscathed either.

Continuing with the theme of history repeating itself, we need to drill down from the macro level and through the stats, to a micro level to get a more personal perspective, and the following would be a good example of the impact of oil price rises, during the last major spike in price levels.

With the rises experienced in 2008, a friend who normally went from the Highveld to the Garden Route in South Africa every December, broke with tradition and decided not to make the trip.

When I quizzed him about missing this annual journey, he said that the costs of the fuel prices at the pump, combined with the toll road fees and increased living costs, had made the trip uneconomic for him and his wife, and they would be staying inland during the festive season and getting more value per rand, than if they had gone to the coast.

If this example repeats itself, then both staycations and golf staycations will increase in popularity, which will not bode well for more remote venues, which draw the bulk of their traffic from the larger urban areas in their particular region.

Hotels not planning for increases yet

A few contacts I have spoken to in the hotel sector, are not planning for price rises yet – a wait-and-see approach being the order of the day for the moment, however this might prove to be easier for those operations with deeper pockets.

These contacts represent a broad operational mix, including feedback from large and medium-size hotel groups with interests throughout the region, and two independent and upmarket lodge operators in South Africa.

The golf courses’ inputs were provided by a mix of traditional clubs, two golf resorts and several golf estates.

The clear consensus is that any price increases will not be in reaction to any specific market factor, such as the war in Ukraine driving up oil prices.

Increases will either be in the form of a nudge up – many have had no rates increases since 2019 – and or by increasing yield. The latter will be achieved by further tightening operational procedures and by phasing out any special packages, or discounts that may have been offered over the past 18 months.

Out on the links, the region’s golf courses face a related challenge.

Most venues want to remain competitive in pricing terms, however there is the added factor for these facilities in that most maintenance equipment is imported with US$-based prices.

There will be input pressures on this sector, but the rand is currently stable against the US$, so this will offer some initial relief.

Longer term, however, these pressures might finally surface, and venues will have to look at streamlining operational procedures, such as reducing grass cutting frequency etc. to generate internal cost savings, and other measures such as extending the operational life of their turf equipment, carts fleets, etc.

These types of activities will help to mitigate some of the upward pressures that will be coming into play a little later this year and then on into 2023. 

For those that are increasing subscriptions and green fees, these will be in relation to CPI, and not as a reaction to any particular economic factor.

All of this would seem to offer some small relief for the embattled consumer in golf and travel terms, so let’s hope that there are no more unpleasant surprises in store for the travel sector in 2022!