eBusiness Weekly
Carin Smith
- Income from accommodation decreased by 88.9 percent in the three months ended August 2020 compared with the three months ended August 2019.
- The industry has lowered its prices due to subdued demand.
- It is still looking unsure whether international tourists from SA’s important source markets will be able to complement the domestic demant.
Total income for South Africa’s tourist accommodation industry decreased by 81.2 percent in August 2020 compared with August 2019, Statistics SA announced on Monday.
This is in nominal terms, therefore, at current prices. There was a 79.4 percent decrease in the number of stay unit nights sold and a 14.3% decrease in the average income per stay unit night sold.
In August 2020, all accommodation types recorded large negative year-on-year growth in income from accommodation. The main contributors to the 82.4 percent year-on-year decrease in income from accommodation were: hotels (-86.2 percent); and “other” accommodation (-74.9 percent).
Income from accommodation decreased by 88.9 percent in the three months ended August 2020 compared with the three months ended August 2019. The main contributors to this decrease were: hotels (-90.2 percent); and “other” accommodation (-85.9 percent).
Seasonally adjusted income from accommodation increased by 99.0 percent month-on-month in August 2020 and increased by 47.2 percent month-on-month in July.
Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of SA (TBCSA), points out that the month-on-month increases must be seen against the “just about zero” activity base during harder coronavirus lockdown levels.
For him the latest data is indicative that people have started travelling again. He however only expects a clearer picture will only emerge once data for September becomes available.
“One thing I have observed is that, as much as many people travelled, they are travelling at heavily discounted prices. This is because the industry has lowered its prices due to subdued demand. So, even if occupancy levels might have gone up, it is not the case from an income point of view,” explains Tshivhengwa.
“None the less, the little bit of movement there was, is not sufficient and we hope towards the high season there will be better movement in the industry, which is experiencing tough times.”
Industry feedback he has received, indicates some continued domestic travel demand in terms of forward bookings. “Compared to the ‘nothing’ we had during lockdown, it is almost like it is starting to rise from zero activity to about 15 percent and to 20 percent,” he explains.
More importantly for him, is to get international tourists here again. That would, however, very much depend on how long big source markets for SA like Germany, the UK, US, France and the Netherlands remain on the current list of countries from which visitors are banned.
The list of countries South Africa considers high risk for the coronavirus – and from which tourists are banned – dropped from 60 to 22 on Monday.
“We must remember that international tourists spend more and keep in mind that some would want to visit only in February, March and April. We have to take a futuristic view,” says Tshivhengwa. “Our domestic market still has more people losing jobs and there is lots of anxiety – so we have to complement our domestic tourism market with international tourists.”
Investec economist Lara Hodes points out that intra-provincial leisure travel (in an approved lodge or hotel) was permitted by government only from the end of July, while inter-provincial leisure visits were authorised from 17 August 2020.
“Accordingly, activity has picked up, supported by pent-up demand. However, the financial effects of the pandemic on consumers has been unprecedented, with many losing their jobs or experiencing salary cuts. As such, many households will likely have had to reduce or eliminate their leisure travel budgets,” she comments.
She too points out that many of the country’s key overseas tourist markets, especially in Europe are currently deemed high risk according to government’s risk categorisation model owing to renewed surges in infection rates and are thus largely preventing them from entering the country.
“The tourism sector, which has been one of the biggest casualties of the pandemic has strong linkages to other sectors and is a key conduit for job creation,” says Hodes.
Dr Kaitano Dube, a lecturer at the Vaal University of Technology, says the latest accommodation data continues to reflect the after effects of the hard lock down on the tourism industry.
“While we expect the picture to somewhat change for September onwards where we expect to see more positive results. The decrease in the number of stay unit nights sold and a 14.3 percent decrease in the average income per stay unit night sold is not surprise in as much as it mirrors the decline in consumer confidence in the tourism and hospitality industry and the erosion of spending power by would be travellers which have a knock on effect on the tourism market,” he says.
“Besides lack of spending power, the majority of people remain sceptical about the safety of travelling and staying in accommodation establishments outside of their homes. The future trends are dependent on how best we manage the pandemic in terms of new infections a spike in new infections will have a dire impact on the fragile tourism industry as that will increase the risk perception.”
On the other hand, if infections go down which, in his view, is unlikely, occupancies can rise over Christmas to much better levels than currently seen as many people would love to take breaks and enjoy the holidays that are coming.
“Most importantly the figures points to the need for support for the industry and its employees to ensure survival and s
