South Africa

South African tourism industry recovering – but still far below 2019 levels

Sun International, Southern Sun, and City Lodge’s performance show that the local tourism industry has a long way to go to reach its pre-Covid levels.

South Africa has exceptional natural beauty and diversity, making it a popular destination for foreign travellers.

The country has developed world-class hotels, bushveld lodges, restaurants, and tourism products to serve this market.

Apart from bringing much-needed foreign money into the country, the tourism industry is also one of the biggest employers.

In 2019, before the Covid-19 pandemic wreaked havoc worldwide, tourism directly employed 4.7% of South Africa’s workforce and contributed 3.7% to GDP.

Despite the devastation in 2020, tourism remains a vital cog in the South African economy, and millions rely on it for their livelihood.

It is particularly important because it created employment for many unskilled South Africans.

A strong and booming tourism sector can make a meaningful difference to the unemployment rate as most unemployed persons are unskilled.

Considering these dynamics, it is clear why the strict lockdowns not only crushed the local tourism industry but also harmed South Africa’s employment and GDP.

Tourism falls within the trade, catering, and accommodation sector. From 2019 to 2020, this sector’s contribution to South Africa’s GDP fell from 13.7% to 11.4%.

The sector has not recovered to its pre-Covid level and still only contributes 11.54% to South Africa’s GDP today.

Sun International, Southern Sun, and City Lodge

Daily Investor analysed three listed hospitality firms – Sun International, Southern Sun, and City Lodge – to get an idea of how the tourism market is performing.

We summed each company’s revenue generated from South African hotels since 2017 to create a sample for the local tourism market.

The combined hotel revenue for the three companies was just above R8 billion in 2018 and 2019. During the lockdown period, this value plummeted to R2.3 billion.

After Covid restrictions were lifted globally, there was a strong recovery. However, it is still far below 2019 levels.

The good news is that the recovery continues, and the South African tourism industry is on track to reach pre-Covid levels again soon.

South African hotel revenue

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