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Tourism Business Council of South Africa

Tourism Business Index shows better than expected Q3 performance

Despite concerns over critical issues such as the new immigration regulations and the impact of the Ebola outbreak in Liberia, Sierra Leone and Guinea on travel, the industry remained buoyant with both the ‘accommodation’ index and ‘other tourism businesses’ index showing improved business performance.

PRETORIA, SOUTH AFRICA – The quarterly TBCSA FNB Tourism Business Index (TBI) has ticked-upwards in the third quarter, exceeding performance expectations with a score of 105.3. Considering that a score of 100 is regarded as the normal trading climate, this is an improvement to the Q2 index of 94,7 and the forecasted Q3 index of 98.9.

TBI is an initiative of the Tourism Business Council of South Africa (TBCSA) and is compiled on behalf of the TBCSA by Grant Thornton. TBI tracks actual business performance in the South African tourism industry and provides an indication of the current and likely future performance of the various businesses. The index is made up of two sub-indices: ‘accommodation’ which encompasses all types of accommodation establishments within the sector and ‘other tourism businesses’ which includes responses from the tourism transport sector, retail, forex traders, business tourism and attractions.

Despite concerns over critical issues such as the new immigration regulations and the impact of the Ebola outbreak in Liberia, Sierra Leone and Guinea on travel, the industry remained buoyant with both the ‘accommodation’ index and ‘other tourism businesses’ index showing improved business performance. Within the ‘accommodation’ index, the hotel sector recorded slower performance compared to other types of accommodation over this period, whilst in the ‘other tourism businesses’ index, the transport, retail and forex traders showed improved performance.

A large proportion of the respondents from both accommodation and other tourism businesses cited no specific positive contributing factors but the weak Rand exchange rate and strong overseas leisure demand are some of the key factors influencing the industry’s overall good performance.

TBCSA CEO, Mmatsatsi Ramawela welcomed the latest TBI results, saying the index affirmed the Council’s view about the resilience of the travel and tourism industry. “Once again, the latest TBI results clearly demonstrate the resilience and immense economic potential of travel and tourism. Q3 was a tough period for us as an industry, fraught with uncertainties in the wake of the Ebola outbreak which continues to be a worrying issue for the global travel and tourism community. However, we remain focussed and will continue to work hard to create an enabling environment for businesses in our industry to thrive”.

Specific to this quarter, the TBI also probed the industry’s views on the impact of the outbreak and the implementation of the new immigration regulations and revealed mixed results.

“When it comes to the Ebola outbreak, the majority of respondents in the accommodation sector (73%) stated that they had not experienced any impact on business as a result of the outbreak” said Grant Thornton’s Head of Advisory Services, Gillian Saunders. She added that understandably, the biggest concern relating to the outbreak came from travel agents, and tour operators.  

On the issue of the new regulations, the index found that despite the postponement of the regulation relating to the presentation of unabridged birth certificates tour operators and hotel groups still expect this regulation to have a negative impact on their business. One of the respondents expressed concern regarding resources, saying “There is simply not enough resources at Home Affairs to attend to the requests of local travellers and for international travellers, not all countries have such documentation in place. It has merely created barriers for selling South Africa as a destination.”

Ramawela applauded the industry for remaining single-minded and dedicated to addressing the issue of the new regulations with Government. “A task team made up of representatives from both the public and private sectors has been set up to further review the impact of the regulations and we look forward to engaging robustly with Government on this matter to minimise its unintended negative consequences on business” she said.

Looking ahead into the next quarter, performance is forecast to remain above normal levels at 109.8 in the last quarter of the year. Businesses will be exploring various avenues to capitalise on the festive season with both the accommodation and ‘other tourism business’ segments expecting fairly strong demand from overseas, domestic leisure and business.

Photo caption: Streets of Johannesburg.

News Editor - TravelDailyNews Media Network | + Posts

Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.

She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.

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