2020 Forecast shows steady, positive tourism growth for SA
South Africa’s tourism industry is predicted to grow steadily as the number of foreign visitors into the greater African continent is expected to increase according to a projected outcome for 2020.
Though the continent has had its fair share of challenges, specifically in SA, in 2015 alone, there was a reduction in the global economy and in SA, the amendments to the country's visa regulations had a major impact on both the hotel industry and tourism sector.
The tourism sector of SA grew by 0.2% in 2014 before falling by 6.8% in 2015, as a result. This has been registered as the biggest decline ever experienced in SA in the last six years.
But still, the tourism sector contributes largely to boosting the economy and reducing poverty, which ultimately contributes to South Africa being a better place to visit. Similarly, the hotel industry in SA plays a vital role in growing the tourism sector.
In October 2015, visa regulations in SA were eased and the Department of Home Affairs is in the process of introducing further amendments to improve regulations. The relaxation of the visa regulations has played a major role in reversing the negative effects and helping the country's tourism sector to recover. This resulted in an encouraging recovery in January 2016 as the tourism sector reached a new record, with over a million tourists arriving in the country for the first time ever.
“Although the South African economy has weakened considerably, the overall outlook for hotels in South Africa is expected to remain positive,” says Pietro Calicchio, industry leader of hospitality and gambling, PwC Southern Africa.
“The devaluation of the rand and the relaxation of certain visa regulations have had a positive impact on the tourism industry in South Africa, making the country a more attractive tourism destination.
“This has also had a positive impact on the number of foreign visitors to South Africa over the past six months,” added Calicchio.
According to PWC's study in Hotels outlook: 2016–2020, it details the trends of international visitors to SA, highlighting the major difference that occurred between 2015 and 2016. This being International visitor numbers to South Africa decreased by 6.8% in 2015. However, there was an increase towards the end of 2015 and this trend has continued in 2016, with January 2016 international visitor numbers breaching the one million mark for the first time. The outlook for 2016 is positive, with international visitor numbers up by 16.8% for the months of January to April 2016 when compared to the same period in 2015.
Outlook for 2020
Pietro Calicchio also told Traveller24, “In the countries covered (South Africa, Nigeria, Mauritius, Kenya and Tanzania), there is continued expansion in the hotels sector with more hotels either under construction or planned during the next five years. We are also seeing more of the international hotel brands opening up hotels in Africa when one looks at the hotels planned or currently under construction.”
By 2020, an estimated 17.8 million travellers would have travelled to SA. This suggests an estimated 4.5% multi-factorial yearly increase from last year, moving forward.
With regards to the overall hotel room revenue in SA, the revenue is estimated to grow at a 7.8% multi-factorial annual rate, resulting in R20.6 billion in 2020, where in 2015, the annual rate rested at R14.2 billion.
Extreme past occurrences
China had the greater decrease of 46% in 2014, while India came in second at 23.5%. This comes as no surprise since China and India are the top two countries with the largest population in the world (China has the world's largest population at 1.4 billion, followed by India 1.3 billion).
However, the UK still holds the award for the largest source of visitors to South Africa with staggering numbers of 407 486 who chose to travel to SA in 2015, showing an increase of 1.4% to the previous year (The UK's population is estimated at 64.1m people).
However, the percentage of Chinese tourists coming to SA has increased rapidly since then. Some 65 million Chinese are expected to travel abroad this year, that's equivalent to the UK population and some 10 million more than the SA population according to the latest statistics by SA Tourism.