thepoll
Do your clients spend more in the UK than other destinations?
Yes, the exchange rate is better
Yes, South African travellers like spending more in Britain/ there is more to spend on in Britain
No, South African travellers to Britain spend, on average, the same amount as other destinations
No, I don’t know – I haven’t noticed

 
DAYS
HRS
MIN
SEC
WTM Africa countdown_March - April 2017
Submit
NewsArticle
Cost of doing business hits travel industry hard Today's News


Print   Send to a friend

The Tourism Business Council of South Africa (TBCSA) has delivered a mixed bag of results in its Tourism Business Index (TBI) for the first quarter of this year. The 'accommodation' sector has remained steady, but ‘other tourism businesses’ (travel agents, tour operators, airlines, vehicle rental companies, coach operators, conference venues, attractions, retail outlets and forex traders) are in decline, with the second quarter of 2016 expected to be even softer.

Some of the reasons cited for the lower than normal business performance levels for ‘other tourism businesses’ include high cost of inputs, the impact of competitor market behaviour and the cost of finance.

Gillian Saunders, head of advisory services at Grant Thornton, noted: “The rising cost of electricity is one of the factors pushing up the overall cost of inputs. Businesses in the sector are mindful of this and many have indicated that extensive plans are being implemented to become more energy efficient. With the latest 9,4% electricity tariff coming into effect from the beginning of April, the timing couldn’t have been better.”

Commenting on the overall outcomes of the report, TBCSA ceo, Mmatšatši Ramawela, said it was clear from the results that businesses, particularly in other tourism sectors, were facing pressures in the operating environment.

Sharing specific views on the performance of the car-rental sector, president of Savrala, Marc Corcoran, said that, despite the emergence of above-inflation vehicle prices, his members remained optimistic.

“With general inflation hovering around 8%, our members are optimistic that the necessary price increases will be absorbed by customers who are aware of the inflationary impacts on car-rental costs,” he said.

Other factors negatively impacting 'accommodation' include the cost of labour and insufficient domestic leisure demand. ‘Other tourism businesses’ have cited the impact of competitor market behaviour and the cost of finance as contributing factors.

From an inbound tourism perspective, strong overseas leisure demand and the weak exchange rate remain the most prominent positive contributing factors.

“We welcome the positive results seen in the accommodation sector, as also highlighted in Stats SA’s Tourist Accommodation report for January,” says Tshifhiwa Tshivhengwa, ceo of Fedhasa. “We believe there is still scope for travel and tourism to grow and for occupancies to increase going forward. However, given the rise in food inflation and adjustments in corporate and Government travel spend amongst other issues, we remain cautious going into the next quarter.”

Mmatšatši said of forecasts for the second quarter: “At a domestic level the combination of various factors such the emergence of above-inflation food and vehicle price increases, the impact of the drought, uncertainty ahead of the local government elections, upcoming rating agency results and the tumultuous political and socio-economic environment, are all likely to continue weighing heavily on the economy and business sentiment.”


Today's News



comments powered by Disqus
Today'sNews
 latest  previous
Tell us one thing you’d change at work and win R5 000
If you could change one thing in your travel...
SAA adds capacity on Johannesburg-Vic Falls route
SAA has increased capacity between Johannesburg...
Emirates has back-up plan for electronics ban
Emirates is the only airline to have come up with...
How safe is OR Tambo?
Earlier this month, a robbery took place at OR...
Correction: Amadeus launches new rail offering for agents
In an eTNW story published on March 24, it was...
Monday smile: First flight to view Southern lights
On March 23, passengers on board an Air New...
Update: London attractions still open to travellers
The London Eye has reopened following the...