Tourism businesses performance in the second quarter of the year recorded an index score of 78.9, the lowest performance since 2011, when a score of 74.5 was achieved in the second quarter.
This is according to the Tourism Business Index (TBI) report for Q2, which was released by the TBCSA this week.
The low performance was a result of persisting tough trading conditions in the South African economy. However, the industry role players have expressed hope of improved performance going forward.
The score of 78.9 is significantly below the score of 100 points, which indicates normal business performance levels. The score is also 7.3 index points below than the 86.2 forecasted for the second quarter of 2016.
Business performance in the accommodation sector for the second quarter was also lower than expected at 92.2, compared to the anticipated 101.6. The other tourism businesses segment recorded a performance level of 68.7, the lowest score ever since the TBI was launched in January 2011. The other segment includes tour and coach operators, vehicle rental, airlines, travel agents, retail outlets, forex traders, conference venues and attractions.
Commenting on the outcomes of the report, TBCSA ceo, Mmatšatši Ramawela, says: “The Q2 results is a clear indication that the trading environment is tougher out there hence the results that are even lower than what we were expecting in the sector following on from the impressive results of Q1.
“It just shows that our recovery as a sector is going to be an even bumpier ride, considering all the added pressure inherent in the broader economy, which will no doubt affect our sector. We still have the after effect of Brexit to contend with, considering that both the EU and the UK are amongst our primary source market for both our business and leisure travellers.” says Mmatšatši.
On a positive note, anticipated business performance next quarter is expected to improve slightly although remain below normal business levels at 84.7 for the third quarter. The accommodation sector forecasts that business performance next quarter will be slightly better than normal at 105.0, while the other tourism businesses segment forecast 69.0.
Other economic indices also point to a general trend of low confidence across South Africa’s economic landscape. The Q2 2016 results of the RMB/BER Business Confidence Index fell to a score of 32, which is below the normal confidence levels (a score of 50 indicating normal).
To view the full report, click here