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SA Tourism Under Pressure

South Africa's tourism continues to struggle

Jul 23, 2011

The travel and tourism sector continued to suffer as a result of prevailing poor economic conditions according to the FNB/Grant Thornton tourism business index.

The TBCSA FNB Tourism Business Index registered 74.5 out of 100 in the second quarter.

When compared to the expected industry performance index of 94.1 for the second quarter, the industry performed significantly worse than expected and somewhat worse than in the first quarter of the year.

"The latest TBI results are certainly a confirmation of what we are witnessing on the ground," said Mmatšatši Marobe, Chief Executive Officer of the TBCSA.

"However, given the extremely difficult operating environment, we are still encouraged to note that the majority of businesses in the sector are working hard to ensure that jobs are not lost" she said.

There has been in a dip in overseas arrivals, linked to a simultaneous drop in domestic leisure and business demand made worse by the strong currency and the rising cost of inputs.

These include tax, power, water and labour.

Other factors cited to have contributed negatively to the sector’s performance in the second quarter include the changing travel patterns, high fuel prices, and the many public holidays that failed to deliver the expected travel spend in terms of domestic travel.

"These results provide an insight to what people need in order to make the right decisions in this industry, such as the decision to expand or not to expand. The ultimate aim of the TBI is to ensure that informed decisions are made where it matters as we gain traction with more participation," said Pieter de Bruin Head of Tourism at FNB Commercial.

An upcoming industry summit takes place in August where tourism sector players are expected to take stock of their future.

"The first summit held in January, identified some crucial issues which industry felt needed attention in order to improve the operating environment for the travel and tourism businesses," de Bruin said.

South Africa's tourism continues to struggle
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