As South Africa’s hospitality industry enters the high season, stakeholders are navigating mixed signals of recovery with occupancy rates still trailing behind pre-COVID levels. While recent data from Statistics South Africa (StatsSA) shows moderate income growth in the accommodation and food and beverage sectors, deep-seated challenges persist, tempering expectations for the season ahead.

According to Rosemary Anderson, National Chairperson of FEDHASA, the industry is bracing for a modest improvement in high-season performance compared to last year. “We approach the upcoming high season with cautious optimism,” she said. “While there are gains in income, occupancies remain below pre-pandemic levels and several barriers continue to impact recovery.”

StatsSA’s August 2024 figures revealed a 5.6% year-on-year increase in income from accommodation and an 8.0% rise over the three months ending August 2024. However, these figures do not reflect a full recovery in occupancy rates, indicating lingering challenges.

Barriers to recovery

Anderson outlined the primary factors contributing to the industry’s slow rebound:

• Air travel constraints: High ticket prices and limited availability of flights are deterring international tourists. “These costs are a major hurdle, especially for key long-haul markets like the USA, UK and Germany, which remain below 2019 levels,” Anderson noted.
• Economic pressures: “Inflation is eroding travellers’ spending power, affecting domestic and international markets,” she said.
• Safety concerns: Perceptions of crime in South Africa continue to deter potential visitors.
• Infrastructure challenges: Issues such as unreliable municipal services add another layer of difficulty, particularly in secondary tourism regions.

Anderson also stressed the importance of diversifying South Africa’s source markets. “While our domestic and regional African markets are crucial, we must aggressively target growth markets like India and China, which are still lagging significantly.”

The role of regional and alternative tourism

A key focus for Anderson is promoting recovery beyond traditional tourism hubs. “Economic prosperity must extend to underutilised regions,” she stated. “By driving visitors to areas outside the usual hotspots, we can foster job creation, uplift local communities and open immense opportunities for diversified accommodation products.”

Anderson also addressed the increasing role of platforms like Airbnb in the tourism landscape. “While Airbnb may fall under the ‘other accommodation’ category in the StatsSA data, including specific figures would provide a clearer understanding of its impact. Expanding accommodation diversity is essential but it must not come at the expense of traditional providers or local businesses.”

Sustaining momentum

Despite the hurdles, Anderson believes the industry has shown resilience and has opportunities to further recover. “The gains we see highlight recovery momentum rather than unprecedented growth, underscoring the need to sustain and amplify this trajectory.”

However, sustaining this recovery requires addressing systemic issues. “We must remain vigilant, proactive and adaptable in addressing air travel barriers, improving infrastructure and enhancing safety perceptions,” said Anderston.

Looking ahead, she remains optimistic about the sector’s potential to leverage the high season. “This period is a test for the industry. By working collaboratively and focusing on inclusive and sustainable growth, we can ensure that the benefits of tourism reach all corners of South Africa.”