Data shows reasons for optimism for South Africa tourism

JOHANNESBURG, Jun 14, 2010 (BUSINESS WIRE) — South Africa saw a 34 percent increase in inbound tourism spending during the first quarter of 2010, and anticipates additional growth opportunities around the 2010 FIFA World Cup(TM), according to Tourism Outlook: South Africa, an annual report released today by Visa Inc. that analyzes Visa cardholder spending for the past two years.

VisaVue(R) Travel data indicates that South Africa weathered the economic headwinds which impacted international tourism during 2009 better than most countries around the world. While many countries saw double-digit drops in inbound tourism spending, Visa cardholder spending by international visitors to South Africa decreased only 2.7 percent from $1.84 billion in 2008 to $1.79 billion in 2009. Despite a challenging climate in 2009, 2010 has already shown reasons for the country’s continued optimism. During the first quarter of 2010, Visa cardholder spending increased to nearly $566 million, up from $423 million during the first quarter of 2009.

The top contributors to South Africa’s inbound tourism spending in 2009 include: The United Kingdom (26 percent), United States (15 percent), Mozambique (5 percent), Germany (4 percent) and France (4 percent). While travelers from Western Europe and the U.S. continue to be the strongest contributors to South African tourism, significant increases in spending by cardholders from emerging markets is indicative of South Africa’s growing stature as a tourism destination. Visa data revealed double- and triple-digit growth in spending by cardholders originating from: Malawi (168 percent), Mozambique (118 percent), Angola (115 percent), China (28 percent) and Botswana (18 percent). This significant growth can also be attributed to developments in payments infrastructure and increased adoption and use of digital currency by consumers in developing markets.

2010 FIFA World Cup(TM) South Africa

As host of the 2010 FIFA World Cup,(TM)South Africa is uniquely positioned to further enhance its visibility globally. The tournament will provide South Africa with a significant opportunity to showcase its unique assets and culture to the world and attract visitors and tourism revenues for months and years to come. This year alone, South Africa expects to welcome more than 370,000(1) international visitors for this global competition. The month-long 2010 FIFA World Cup(TM) is expected to add 93 billion rand to the South Africa economy, translating to a 0.54 percent boost to gross domestic product, a significant contribution given that the total South Africa GDP growth in 2010 is estimated at 2.0 to 2.5 percent(2).

“The influx of international tourism surrounding the 2010 FIFA World Cup(TM) has helped to support continued infrastructure developments and economic growth within South Africa,” says Charles Niehaus, General Manager, Visa Sub-Saharan Africa. “As a longtime partner to FIFA and the tourism industry, Visa is committed to delivering a secure, reliable and convenient payments system to South Africa consumers and merchants, and providing current spending information that can help businesses and the government to enhance inbound tourism arrivals and revenues.”

Retail Purchases Top South Africa Inbound Tourism Spending

Consistent with tourism spending trends over the past three years, retail purchases continued to account for the largest share of tourism spend on Visa cards in South Africa in 2009, followed by travel-related purchases such as lodging, airlines and travel agencies.

During the first quarter of 2010 the largest merchant segments for South Africa inbound tourism spending, based on transaction volume, were general retail related purchases, such as clothing and food related transactions. Several merchant segments showed significant growth over first quarter 2009 levels: Visa cardholder spending in the restaurant segment increased 48 percent, lodging purchases increased 41 percent, general retail purchases increased 32 percent, auto rentals increased 29 percent and airlines saw a 19 percent increase.

Tourism Outlook: South Africa is based on VisaVue(R) Travel Data, a strategic tool for the tourism industry that analyzes Visa cardholder spending patterns worldwide. Visa’s network of 29 million merchants and 1.8 billion cards provides an unrivaled perspective into international tourism spending. Visa will be providing updates on inbound cardholder spending throughout the 2010 FIFA World Cup(TM).