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Cover Story – October 2015

As we enter the fourth and final business quarter for 2015, South Africa’s tourism industry continues to ‘Inspire new ways’ – a slogan that has taken on new meaning as the local tourism sector attempts to overcome the serious crises it faces as a direct result of the country’s amended visa regulations.

Total foreign arrival figures have dropped by 7.3% across all inbound source markets (as at May), while the Airports Company of South Africa (ACSA) reports declining international and regional flights landing at all but one international airport – the exception being Cape Town, which recorded an increase of 8.7% and 8.0% respectively (as at August). On a positive note, ACSA reports growth in the domestic market, buoyed no doubt by increased competition in the local airline industry as new carriers vie for their attention. South Africa’s domestic tourism market remains resilient with an increase of 7.0% RevPar across all hotels. (Read more on page 12).

The impact on the South African tourism industry is clear in the latest figures, but as Gerrie van Biljon, executive director at Business Partners, says; “There is much to be hopeful about when looking past the recent storm clouds. For local businesses connected to international tourism to remain hopeful under such conditions, entrepreneurs need to do what they do best: take a long-term view of things and swing into action immediately.

He explains that the long-term view isn’t as gloomy. “It appears that government is not unified over the new visa rules, with the Deputy President now tasked with heading up an inter-ministerial committee on visa regulations to examine concerns about the country’s amended visa regulations which might lead to a rethink.

Not much hope there, says SATSA’s CEO David Frost, following the ‘Enough is Enough’ Tourism Industry Conference held on 01 October at the Indaba Hotel in Fourways; “We’ve had no communication with government since the regulations came into effect. As an industry collective under the Tourism Business Council of South Africa (TBCSA) umbrella, we have written to the deputy president, and tried to engage, but have been given no opportunity to sit down and have a discussion with any government body since the implementation of the regulations in June.”

TBCSA has lashed out at home affairs minister Malusi Gigaba over his recent public criticism of the tourism industry in which he said that opposition to the visa regulations is based on “lies and cooked-up figures” Frost says they have had enough of the baseless criticism.

“We are being subjected to inconsonant, draconian regulations in place by home affairs. It’s our democratic right to speak up on our members’ behalf and to question what is going on,” says Frost.

Despite the doom and gloom, South Africans are a resilient and entrepreneurial lot, and with the rand finding itself at a level that tourism businesses have been dreaming about for a long time, South Africa is arguably one of the best value-for-money destinations in the world.

When analysing the industry, van Biljon says that there is still plenty of room to develop our tourism offering as most local tourism businesses have only scratched the surface. “Many offer ‘stereotypical’ services, such as standard safaris, tours and overnight stays. Experiences based on cycling, for example, are still scarce in South Africa when compared to other parts of the world. The industry is wide open for entrepreneurs to develop unique experiences.”

He urges tourism enterprises to tackle the difficult time ahead with immediate action. “Tourism businesses that had been focusing on international tourists need to work on providing enticing packages for the local market to fill as many beds and seats as possible if the international tourists aren’t coming in the numbers that they used to.”

Enterprises that have traditionally catered for domestic tourists are not exempt from pressures. “In these conditions, they should expect greater competition from their more internationally focused peers.”

A quiet time in a business is never a good thing, but that does not mean it can’t be put to good use, says Van Biljon. “Tourism entrepreneurs should use any lull in the business to rethink and rework their product offering, costs and marketing so that they are ready when the tide turns, as it always does.”

He adds that South Africa’s reputation for successfully hosting events remains intact and that this is set to grow given the recent awarding of the 2022 Commonwealth Games. “Durban alone is expected to attract 200 000 visitors as a result of this event.” (See page 22).

The long-term outlook for the conference and exhibition industry, boosted by three world-class conference centres in Johannesburg, Cape Town and Durban, is another positive. “Business travellers spend more than holiday tourists, and tend to add some leisure travel before or after a conference or business trip. Research shows that as many as two in five business travellers return later on holiday.”

Expanding on the subject of South Africa’s economic volatility, Professor Melville Saayman, of North West University, questions if government is an asset or a liability to tourism growth in South Africa (see page 16), while Unathi Henama, lecturer in the Department of Tourism Management at the Tshwane University of Technology, says South Africa must ensure that it becomes competitive in its attraction of tourism revenue (page 18).

One way of doing this may be through product differentiation, as Nivashnee Naidoo, MD at Fair Trade Tourism says; “The current extreme challenges that South Africa as a tourism destination faces can be countered through broader tourism development and encouraging synergy with our African counterparts, as research indicators show that awareness for responsible, sustainable tourism practices is growing in our region, as well as globally.” (Read more page 08).

Tour operators will find Lindsay de Heer’s article on selecting Tour Operator Software to be of benefit to their businesses (page 14), while our attraction, property and restaurant reviews provide unbiased recommendations for tour itineraries (pages 14-15).

Our transport review on the new Mercedes-Benz Vito will also be of interest to Tour and Shuttle operators (pages 10, 26 & 28).

And finally, a reminder to readers to attend the Africa Travel Association (ATA) annual congress, which takes place in Nairobi, Kenya from 9 – 14 November.

Enjoy your reading!

Des Langkilde. editor@tourismtattler.com