Latest Tourism Business Index reveals positive 2013 outlook
This is the second consecutive quarter that the TBI has recorded performance levels above the normal level of 100 and is a clear indication of the extent to which business is recovering from the recessionary impacts and excess of supply it suffered post the 2010 Soccer World Cup. – Mavuso Msimang, Board chairman, Tourism Business Council of South Africa
Expectations for the first quarter of 2013 are similar to Q4 2012 performance at 102.5.
Board chairman of the Tourism Business Council of South Africa (TBCSA), Mavuso Msimang, said the latest index results provided relief for a sector that has been through two very tough years. 'This is the second consecutive quarter that the TBI has recorded performance levels above the normal level of 100 and is a clear indication of the extent to which business is recovering from the recessionary impacts and excess of supply it suffered post the 2010 Soccer World Cup,' he said.
The TBI for the accommodation sector in the fourth quarter of 2012 was also higher than normal at 108.4 and much better than that of the third quarter of 2012 (98.1), while the other tourism businesses recorded a Q4 index of 101.6, slightly below the Q3 performance of 103.3.
Almost a third of TBI respondents cited strong domestic leisure demand as a positive contributing factor for the accommodation sector in the last quarter. And while some businesses experienced positive numbers from the overseas leisure markets, others felt demand was weak.
Eddy Khosa, chairman of the Federated Hospitality Association of Southern Africa, said the TBI overall showed a positive outlook for the accommodation sector, predicting stability or growth.
‘While there have been rumblings from industry in the past that the reality on the ground does not match the tourist arrivals statistics, in the fourth quarter of 2012, the statistics and TBI are a fair reflection of what is happening out there in the industry,’ he said.
Tourist arrivals statistics for the January to September 2012 period revealed an overall increase in tourist arrivals of 10.7% with overseas arrivals increasing 16.4% when compared with the same period in 2011.
When looking at 2013, on balance, accommodation respondents expect a fairly similar overall annual performance as 2012 while other tourism businesses are very positive about the outlook for 2013. More than 41% believe their businesses will perform better than normal in the next year.
The majority of the accommodation sector respondents expect domestic business markets to offer the best potential growth in 2013, followed by foreign leisure and then domestic leisure. Other tourism businesses expect growth to come from the foreign leisure markets, followed by domestic markets.
Wiza Nyondo of First National Bank, co-sponsor of the report, said the results showed the market had begun to recognise South Africa as a sought-after destination. ‘Although we've seen some instability, we still believe in South Africa's diverse offering of services and products where industry professionals can partner to help transform our country,’ he said.