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#BizTourismReport: SA tourism market analyses for July 2019

This is a monthly series of articles to provide market intelligence on the tourism industry in South Africa. It provides the latest available tourism data and historical data can be found in previous articles. The information included below was the latest available on 23 July 2019.
#BizTourismReport: SA tourism market analyses for July 2019

Arrivals


The latest available data from Statistics South Africa is for January and May 2019.

Current periodChange over same period last year
UK201 1191.2%
Germany139 783-8.3%
USA146 6441.8%
India42 3341.0%
China39 5602.0%
Overseas Tourists1 099 271-2.2%
African Tourists3 255 469-1.2%
Total Foreign Tourists4 360 643-1.4%


Please note that African tourists plus overseas tourists do not add to total foreign tourists due to the exclusion of unspecified tourists which could not be allocated to either African or overseas.

The latest available data from Statistics South Africa shows the slight recovery of the UK market of 1.2% growth in the first 5 months of 2019 following a decline of 4.9% during the first three months of 2019. This stabilisation could be attributed to lesser fear and more understanding of the impact of Brexit.

The decline in the German market decreased to 8.3% during the first 5 months of 2019 following the decline of 14.1% in the first three months of 2019. The USA, Indian and Chinese markets showed growth between 1% and 2%.

Overseas tourists declined by 2.2% during the first five months of 2019 compared to 6.3% during the first three months of 2019. Asia and North America continue to be the only overseas regions recording growth while in Africa, the East and Central Africa region and the North African region contributed to growth. Factors contributing to the growth from these regions are strong regional economies and new air connectivity, particularly within Africa.

Hotel Statistics


The hotel statistics are supplied by STR (https://www.strglobal.com/) which has analysed and reported on data from 63 000 hotels, representing 8.4 million rooms in 180 countries.

The latest available data from STR is for January to June 2019:

Current periodAverage room occupancy (ARO)Average room rate (ARR)Revenue per Available room (RevPAR)
All Hotels in SA59.4%1 279821
All 5-star hotels in SA64.0%2 3421 657
All 4-star hotels in SA60.3%1 177777
All 3-star hotels in SA58.3%967582
Change over same period last year   
All Hotels in SA-0.5%2.4%1.9%
All 5-star hotels in SA1.1%1.4%2.5%
All 4-star hotels in SA-0.1%2.0%1.9%
All 3-star hotels in SA-0.3%1.9%1.5%

Source: STR

The latest available data from STR indicates a slight recovery in the performance of South African hotels during the first half of 2019. The average room occupancy has remained stable for three and four-star hotels, with five-star hotels recording a small increase. Average rooms rates have increased but below the average inflation rate which means that in real terms the average room rates have declined.

Factors contributing to these results include the sluggish growth in foreign tourism and slow domestic tourism market.

Airport arrivals


ACSA has not issued new data since the last article and the latest available data from ACSA is for January to June 2019:

Change over same period last yearPassengers arriving on International FlightsPassengers arriving on Regional FlightsPassengers arriving on Domestic Flights
OR Tambo International0.1%3.1%5.0%
Cape Town International4.1%-1.6%2.3%
King Shaka International8.8%-16.5%5.5%


Please note that passengers arriving on international flights may be South African’s returning from an international trip. Similarly, passengers arriving on a domestic flight might be foreign tourists travelling on a domestic airline between domestic destinations.

The ACSA data shows encouraging results with the recovery of Passenger Arrivals on international, regional and domestic flights to OR Tambo. While Cape Town and King Shaka International Airports have benefitted from new routes to boost passengers arriving on international flights, OR Tambo has not. Passengers arriving on international flights and domestic to OR Tambo in June 2019 increased by 6.1% and 8.7% respectively over June 2018.

The results from OR Tambo, along with the increase in passengers arriving on domestic flights to Cape Town and King Shaka International Airports may be pent up demand as domestic business tourists postponed their business trips to June due to the elections in May.

Conclusion


The STR and ACSA data for the first six months of 2019 shows positive trends. These results indicate that the Stats SA results for June will be more positive.

Given the poor results, particularly from South Africa’s key source markets during the first half of the year, it is hoped that I am proven wrong in my belief that South Africa should not expect much, if any, growth in foreign tourism.

The results for domestic tourism in June may be due to domestic business trips (both government and private) being delayed until after the elections and it is hoped that the economy will now begin its slow recovery and that domestic tourism will track this recovery.

About Martin Jansen van Vuuren

Martin Jansen van Vuuren is co-founder and director of I and M Futureneer Advisors Pty Ltd. He is a number cruncher, provider of market intelligence, strategist, economist, futureneer and advisor.

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