Industry leaders have cautioned that current seismic shifts in global politics – including withdrawal of US funding for NGOs – present a new set of challenges for Africa’s MICE sector.
“These major decisions may sound political but they have an impact on our work,” said Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of South Africa, on the sidelines of Meetings Africa in Sandton on Wednesday (February 26), referring to the loss of more than US$450 million in United States Agency for International Development aid for the country.
“Most of that money was spent on healthcare and many of those healthcare companies had conferences. The agriculture sector is also affected. From big companies to universities, that conferencing income stream is gone,” Tshivhengwa said.
Nico Vivier, Minor Hotels Africa’s Regional Director of Operations and Development, told Tourism Update that reduced budgets for non-profits will leave many businesses “reeling” in the conferencing space.
“The business from NGOs accounts for a lot of room nights, travel income and conferences so it has a massive impact on Africa, including Southern Africa, particularly smaller countries that rely heavily on local and regional MICE business,” Vivier said, stressing that tourism businesses must find ways to plug the gaps.
“We’re not sitting back and giving up. This presents more opportunities to attract international conferences. We have to talk about it and find new strategies. Major energy, oil and gas projects are attracting huge foreign direct investment so it’s important to intensify the work being done in international sales offices to build business.”
Sven Bossu, CEO of the International Association of Convention Centres, highlighted the need for event organisers and tourism business leaders to keep up with the breakneck pace of change in global economies.
“When you compare GDP with the revenue generated by events, there’s a clear correlation – the more GDP, the more events revenue. Anything that impacts the economic environment, nationally and internationally, impacts the businesses and industries that drive major global business events,” Bossu said during the Southern African Association for the Conference Industry Morning Memo breakfast at Meetings Africa on Wednesday.
‘Prepare for travel budget cuts’
Tshivhengwa further highlighted the need for industry to be futureproof against potential drops in government travel budgets. This follows the postponement of South Africa’s Budget Speech on February 19 due to disagreements about the implementation of a 2% value-added tax (VAT) hike.
“We need to keep in mind that, whenever there is no revenue or lack of revenue within government, conferencing and travel expenditure are the first to be cut.”
Last week, the tourism industry warned of the “devastating impacts” of a VAT increase.
“Accommodation providers, restaurants and tourism businesses are already battling rising operational costs due to load shedding, soaring food prices and increased wages. Adding another tax burden will force many businesses – especially small and independent operators – to either absorb the cost at the expense of their survival or pass it on to consumers, making travel and dining out even more unaffordable,” said FEDHASA National Chairperson Rosemary Anderson.
The 2025 Budget Speech has been rescheduled to March 12.
