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South Africa: Persisting tough trading conditions affecting tourism

Jul 20, 2016

PRETORIA, South Africa - The Tourism Business Council of South Africa reports that the persisting tough trading conditions in the South African economy are affecting businesses in the sector and have led to below normal levels of business performance as recorded in the 2016 Quarter 2 Tourism Business Index. However, the Travel and Tourism industry being the resilient sector that it is, both locally and internationally, role players have expressed hope of improved performance going forward.

These are the sentiments highlighted in the latest results of the Tourism Business Index (TBI), published today by the Tourism Business Council of South Africa (TBCSA). The report shows that businesses in the travel and tourism sector were trading under tough conditions in Q2, recording an index score of 78.9, significantly below the score of 100 points, which indicates normal business performance levels. The score is also 7.3 index points below than the 86.2 forecasted for the second quarter of 2016.

Commenting on the outcomes of the report, TBCSA CEO, Ms. Mmatšatši Ramawela, says that the Q2 results is a clear indication that the trading environment is tougher out there hence the results that are even lower than what we were expecting in the sector following on from the impressive results of Q1. It just shows that our recovery as a sector is going to be an even bumpier ride, considering all the added pressure inherent in the broader economy, which will no doubt affect our sector. We still have the after effect of Brexit to contend with, considering that both the EU and the UK are amongst our primary source market for both our business and leisure travellers,” says Ramawela.

Comparing the TBI with other economic indices in South Africa, it is apparent that there is a general trend of low confidence across South Africa’s economic landscape. The Q2 2016 results of the RMB/BER Business Confidence Index fell to a score of 32, which is below the normal confidence levels (a score of 50 indicating normal). On a slightly positive note, the SACCI Business Confidence Index (BCI) showed a slight increase in the quarterly average (from 93.1 to 94.1) in Q2 2016, although the overall trend is still downward from 2015. This being the case, it is going to be critical for role players in the tourism sector to “tighten” their belts and work harder to make South Africa a compelling proposition all around.

South Africa: Persisting tough trading conditions affecting tourism

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