Which travellers are spending the most on travel? We take a look at five source markets that are big spenders.
1. The UK
Mariki Theron, International Sales Manager at Legend Lodges points out that the UK, one of SA’s largest source markets, features high on the Big Spenders Index for 2015 in terms of spend on premium travel.
Ruzandri Stoltz, Marketing Manager at African Hotels & Adventures and Three Cities Hotels and Saskia Brown, Sales & Marketing Manager at Kwandwe Private Game Reserve, also identify the UK as a key market in terms of high spend.
South Africa’s arrival stats for 2014 show that the UK continues to be South Africa’s largest source market, with 401 914 tourists tourist arrivals from this market last year, up slightly on 2013’s 388 336 arrivals. (Have a look at international arrivals stats to SA from 10 of the biggest source markets here.)
Velma Corcoran, Executive Marketing Manager at Cape Town Tourism, says there are two key luxury segments out of this market, as identified by research from SA Tourism. These are the Experienced Wanderluster, with an average age of 36, as well as what SA Tourism terms the ‘Next Stop South Africa’ market, which ranges from 50 to 75 years of age.
Corcoran describes the wanderluster as primarily a leisure traveller. They are interested in wildlife, meeting South Africans and beautiful scenery, she says. “They take part in adventure sports and special-interest activities.” The older segment travel to see natural beauty, meet locals and to experience wildlife and culture. “They are likely to travel to South Africa on a self-drive trip that might be arranged for them but is likely to be in complete luxury.”
2. Germany
Germany is a key market for SA and also a market with high spend, says Stoltz. Theron says that for the international market, Europe is still the best in terms of luxury spend, particularly Germany and the UK.
The German market grew 10% from 2013 to 2014, with 274 571 arrivals last year compared with 249 117 the year before.
3. The US
Theron says there are two significant segments, one that is price sensitive, pushing for rates, and the high-spend segment. “For travel, specifically to South Africa, the rand-dollar exchange influences quite a lot. With the weaker rand, people spend a little bit more.”
Theron points out that the amount spent on luxury depends on an individual’s disposable income. “In general, the growth for individuals’ disposable income is the highest from North America, and then Europe and Asia Pacific.” From the US, Corcoran again identifies the ‘Next Stop South Africa’ market, aged between 50 to 75 years of age
The US market to South Africa has grown, with 309 255 tourism arrival in 2014, compared with 294 483 in 2013. The US market accounted for almost 14% of overseas tourist arrivals in 2014.
4. India
From India, Corcoran says the biggest spenders are seasoned leisure seekers. These are experienced travellers who prefer a full itinerary. This segment includes multi-generational travel. People in this segment want to experience a different country and are looking for safari and wildlife experiences as well as nature and culture. They are also looking for shopping, theme parks and water parks as well as family adventure activities, she says. They are likely to stay in four- and five-star hotels with extensive facilities. Corcoran adds that they like to travel in May and June when it is unbearably hot in India.
Theron says, surprisingly, India is high on the Big Spenders Index for 2015 for spend on premium travel. Although, again this is not a large market for SA. At 85 639 arrivals for 2014, India accounted for just under 4% of SA’s overseas arrivals last year.
Travel to SA from this market had shown growth in the recent past but showed an 8% dip in arrivals for 2014 compared with 2013, with the biggest dip year-on-year during the final quarter, at 15%. This has been viewed as an effect of both the Ebola outbreak in West Africa and the implementation of SA’s new regulations, which require travellers to make visa applications in person.
5. Saudi Arabia
“If you look at the Big Spenders Index for 2015 – the countries that spend on premium travel – the highest markets are not necessary big markets for SA,” says. She uses the example of Qatar and Saudi Arabia.
According to Corcoran, Saudis travel primarily in their summer holidays, between June and August and over Eid. “Luxury hotels and lodges are desired,” she says, adding that there is potential for chauffeur-driven packages. This market is looking for a temperate climate, beautiful scenery and diverse culture. Shopping, entertainment and attractions for children are also important as well as Halaal food.