For years now tourism has promised to be the next boom sector in the SA economy. And though the industry has shown steady growth since 1994, the arrival and financial numbers have been far from spectacular. This may finally be changing, albeit slowly.
The strong rand of the past four years has clearly had an impact on overseas arrivals, yet this year's first-half numbers from SA Tourism, the marketing body for the industry, suggest that could well be behind us.
Moreover, domestic tourism , which constitutes by far the larger proportion of tourism overall, is strong. "Every successful destination has a big domestic tourist industry. For example, in France, the world's largest foreign tourist destination, the domestic tourism industry accounts for about 70% of its total tourism," says Moeketsi Mosola, CEO of SA Tourism.
During 2004, foreign tourist arrivals to SA rose by 2,6% against worldwide international travel growth of 10,7% and 30% growth in arrivals for Kenya, Africa's second-largest tourism market after SA with 1,1m visitors. In the first half of this year, though, arrivals to SA rose by 8,9% compared with worldwide growth of 5,9%.
As far as tourist receipts are concerned, global tourism is big business. According to the World Tourism Organisation (WTO), sub-Saharan Africa's share was euro 12,8bn, or 2,1% of total global tourism spend. It's estimated that SA's revenue from foreign tourism was R55bn last year, with R30,1bn coming from overseas visitors, R20bn from African land visitors and R4,7bn from African visitors arriving by air.
But that first-half growth in arrival numbers was due almost entirely to 252 000 more visitors from Africa, representing 90% of the increase, with the bulk of that coming from three neighbouring countries - Lesotho (30%), Zimbabwe (38%) and Mozambique (15%).
Africa continues to be the main source of foreign tourist arrivals to SA, with over 70% of visitors coming from the continent. Europe is the second-largest source at almost 20%.
But the debate about the nature of arrivals is the one that really matters. Overseas numbers, mostly from Europe, but also from North America and Asia, are the ones that bring the big tourist dollars, whereas spending by visitors from Africa, particularly neighbouring countries, is small by comparison.
The overseas arrivals are the ones that create jobs because they spend far more says the WTO, which estimates that every eight "genuine" tourists create one new permanent job. The WTO defines a tourist as an overnight traveller away from home for more than one night but less than one year.
SA is behind this ratio with an estimated one job per 12 international arrivals, according to SA tourism numbers In Kenya the ratio is around one job per five arrivals.
Despite the lower ratio and a scarcity of statistics on the impact of domestic tourism, the sector is showing positive growth in both employment and GDP.
According to World Travel & Tourism Council estimates, 522 000 people are employed directly by the SA travel and tourism industry, contributing 3,9% to GDP. I ncluding indirect employment the industry employs over 1,1m people, contributing 9,1% of GDP. SA Tourism's figures show that in 2002 tourism's contribution to the economy was R72,5bn, or 7,1% of GDP, rising to R93,6bn, or 7,4% of GDP, last year.
And the jobs required in tourism are for the most low-skilled, ideally suited for SA, where most of the jobless lack the skills to enter into the high growth sectors of the economy.
The impact of tourism would be much larger, say analysts, if most visitors to the country were "genuine" tourists. Instead, two categories dominate the numbers: the large number of (mainly British) "visiting friends and relatives" and the huge number of visitors from Africa who arrive by road or rail and account for almost 70% of all arrivals.
African visitors to SA arriving by air constitute a small percentage but tend to have a high average spend. African terrestrial arrivals, on the other hand, are large and growing, but their spending patterns and value of spend differs markedly.
On the face of it, African business looks good, until one scratches the surface to see how much each visitor spends. In a recent research report auditing firm Grant Thornton finds that overseas visitors spend almost R16 000/trip, with African air visitors not too far behind at R12 600. African land visitors spend a lot less - on average R4 515/trip.
Grant Thornton suggests most African land visitors can be assumed to be shoppers, traders and business people and the occasional high-spend categories such as medical. Reported holiday levels are fairly low - only 12% of arrivals from Lesotho say they are here to visit the country. For Mozambique the level is 20% and Zimbabwe 29%.
"We mustn't be xenophobic about the African land arrivals," says Mosola. "Their numbers are growing at about 10%/year in the areas of leisure, business, trading and investment; they tend to mix business with pleasure."
Mosola says that the consistent growth out of Kenya and Nigeria is a strong indication that the investment SA Tourism has made in these key markets over the past three years is beginning to pay off. "There is no doubt that Africa continues to be the backbone of tourism receipts in terms of both arrivals and value and we will continually strive to grow our market share in the region."
This is a solid strategy, as it's unlikely that many African land visitors will be attracted to many other African countries, apart from SA.
But it does raise the issue of how "genuine" African tourists are and the benefits they bring to the tourism industry as opposed to the retail sector.
A good example is the impact of Mozambicans visiting Nelspruit to shop. Since visa requirements between SA and Mozambique have been abolished, the number of arrivals has increased. And their spending is undoubtedly making an impact; on average, Grant Thornton, estimates, Mozambicans spend about R7 500/day during their stay.
To boost tourism spending, though, analysts say the future strategy for the tourism industry must concentrate on increasing this country's share of higher-spending, predominantly overseas visitors.
As part of this strategy SA Tourism has recently embarked on an initiative to lift the number of convention visitors to SA. The country has three outstanding convention centres in Cape Town, Durban and Sandton. Conference delegates tend to have lots of cash and they tend to spend more daily than other tourists.
Mosola says SA should use its successful track record in hosting large conferences, such as the 2002 World Summit and this year's World Petroleum Congress, to build on in future.
"We already have a great infrastructure but our openness and multicultural society is another plus," says Mosola. "We want to get into the top 10 in the world when it comes to convention ranking," he adds.
Part of SA Tourism 's strategy is also to target global corporations that have subsidiaries operating here. Many of these companies offer incentive travel to some of their top-performing employees and Mosola wants to help them make it easier to do this in SA.
There are significant obstacles, though, in achieving a high-growth strategy. Top of the list, apart from the seasonality of visitors, is the relatively low number of flights to the country. On the key air routes between SA and the UK, France, Hong Kong, the Middle East and Nigeria, many analysts complain that SA Airways is restricting the growth in tourist numbers.
The bilateral transport agreements that exist between SA and these countries allow them to have a certain number of "slots" in each other's airports. SAA is unhappy with the slots that it has been awarded and has decided not to take up all of its available capacity. Furthermore it prevents other airlines from raising the number of their flights to SA unless it gets prime slots at Heathrow, London, for example.
Recently SAA CEO Khaya Ngqula came out against more flights from airlines from the Middle East, because they were apparently diverting passengers from SAA's traditional European routes. The Middle East has been identified as one of SA's key tourism growth markets.
"At our meetings SAA is always mentioned as the key inhibitor to greater tourism arrivals. Government needs to decide whether the airline is there to make big profits or serve SA's wider economic needs," says one SA Tourism director.
Mosola adds: "I will not support SAA in requesting additional capacity that they don't use."
And it's not just in overseas jurisdictions where SAA capacity and pricing is a problem. Says Mosola: "SAA's pricing structure on the African continent is way too high, which is a big constraint for regional air travel. SA Tourism will work with many other carriers to open up the SA market.
"We have no space for players who won't work with us."
