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Tourism Business Index Half-Year Report 2017

The Tourism Business Council of South Africa (TBCSA) has released its half-year Tourism Business Index (TBI) Report, which tracks and provides information about the level of business performance across the travel and tourism value chain, and also forecasts prospects for short-term future performance.

Overall, the industry experienced lower than normal business performance between January and June 2017, recording an index of 82.7 (where 100 is normal).  Anticipated business performance for the period July to December 2017 is also expected to be slightly down, recording an index of 80.4. This indicates a slightly less optimistic view of business performance for the remainder of the year.   

Delving deeper into the performance of the two main TBI categories – ‘Accommodation’ and ‘Other Tourism Businesses’ – actual business performance for the Accommodation sector came in well below normal levels and notably lower than expected with an index of 79.1, compared to the anticipated index of 89.3. Looking ahead, the Accommodation sector expects performance levels to decline further to an index of 66.1 – the lowest level of anticipated performance for the sector since the start of the Tourism Business Index project in 2010.

In the Other Tourism Businesses category, overall business performance also declined to an index of 85.5. However, this is forecast to improve in the second half of 2017 to an index of 91.4. This reflects a below average, but a slightly more optimistic outlook for a segment of the industry that comprises amongst others tour operators, coach operators, vehicle rental companies, airlines, travel agents, retail outlets, forex traders, conference venues and attractions.

Insufficient overseas leisure demand, insufficient domestic business demand and increases in competitive supply are the top three factors cited as contributing negatively to performance.  Other reasons cited include the downturn in the economy, increases in rates and taxes and continued water restrictions.

The latest TBI results also correlate with the findings of other industry-specific reports released by Statistics South Africa, such as the tourist arrival figures (looking at a six-month overview) as well as the recently released 2016 Domestic Tourism Survey.

Amongst the positive factors cited is the possible increase in domestic leisure demand, as well as tourist demand generated through conferences and events across the region.

Commenting on the report, TBCSA Chief Executive Officer, Ms. Mmatšatši Ramawela said: “The decline we have experienced recently in business performance has the potential to be temporary if the sector, as a collective unit, takes up the challenge to address the underlying socio-political and economic issues that are affecting business and consumer confidence at a broader level.”

Read More: Download the Full Report