South African tourism bouncing back – with a catch

While South Africa’s international tourism industry has started to recover, it still lags at 81% of pre-Covid levels due to uneven market rebounds, limited geographical spread, and inadequate public-private collaboration.

This is according to Southern Africa Tourism Services Association CEO David Frost, who explained the poor state of South Africa’s tourism sector on The Money Show with Stephen Grootes.

“We are not in a good place in terms of international tourism into South Africa,” Frost said.

Comparing the January to November period in 2024 to the same period in 2019, South African tourism is only 81% of where it used to be.

According to BDO South Africa, from January to May 2024, 3.8 million tourists visited South Africa, 561,000 less than the number of tourists who visited the country in the first five months of 2019.

With 930,000 overseas arrivals between January and May 2024, the lag behind 2019 overseas arrivals for the same period is at 15% and 17% behind 2018 numbers.

“Compared to 2023, when YTD growth over 2022 overseas numbers was 80%, growth for the first 5 months of 2024 has been disappointing at only 8% and should be at least 30% or more if we are to reach 2019 numbers by the end of 2024,” the organisation explained.

“This means we failed to regain 194,000 overseas tourists resulting in a loss to date of R4.8 billion in direct revenue, excluding the multiplier effect of this direct spend in our economy.”

Frost identified a number of reasons why this recovery has been sluggish. Notably, some markets have shown stronger resilience than others.

For example, the US, which is South Africa’s second biggest tourist market, has almost completely recovered to where it was in 2019.

“But the other key markets, particularly our key markets out of the UK and Europe, are lagging well behind,” Frost said.

“The UK is only at 79%, Germany’s at 79%, and there’s a solid mid-market that we used to get out of those countries that were far more intrepid that moved around the country.”

Some areas, such as Cape Town and high-end lodges at the Kruger, have recovered to well over 100%.

However, since South Africa’s tourism is only localised to a few areas, it means that the country’s geographical spread has become much worse, Frost explained.

Areas like the Garden Route, Mpumalanga, and KwaZulu-Natal are only around 50% to 60% of where they were in 2019, “and they are certainly feeling the pinch”.

Part of what makes South Africa such an appealing travel destination for international tourists is its exchange rate.

In this regard, South Africa remains an incredible value proposition for the rest of the world, which makes this slow recovery even more notable.

However, Frost explained that proper collaboration isn’t taking place between the public and private sectors in South Africa.

“We don’t have a proper public-private conversation. We’re not getting down to that at a granular level,” he said.

Currently, he said the Southern Africa Tourism Services Association does not even talk to SA Tourism.

“We don’t talk to them, and they don’t talk to us. We are open. We have put forward a modality called a structured engagement that we can get down and strategise around this.”

There are also other key players that are ready and willing to engage, he explained.

“People like Nando’s – they’ve got a big footprint in the UK – are willing to work with us.”

However, despite how much the public sector claims to want to collaborate with the private sector, this simply isn’t happening on a practical level.

“It’s about getting into the room with the top private sector brands and the top SA Tourism brands,” he said.

From there, he said they can build a strategy from the ground up to address the country’s tourism problem, using different tailored approaches for different countries.

Unless they can do this and align private sector spending with the very necessary spending from SA Tourism, “we’ll be on this perennial path of 81%”.

Recently, the Department of Home Affairs selected a group of tourism companies to fast-track visa applications of customers from India and China.

Frost welcomed this move – which is specifically focused on group travel applications that were clogging the system up – and called it a game changer.

“We hope that will alleviate the blockages and certainly give us a short-term kick-on.”

However, Frost stressed that more progress is still needed.

“We see it as a very interim measure. The ultimate goal is a fully electronic visa system akin to what’s in play in Tanzania and Kenya.”

Where South Africa has 81% of its pre-Cvodi arrivals, Tanzania and Kenya have 120% and 140%, respectively.

“They’re eating us for breakfast because they make it simpler and easier,” Frost said.

“The ultimate goal is this electronic visa system that Home Affairs are working on, and the sooner that can be arrived at, the better.”