Business & Finance

Tourism Business Performance Rises In Q4 2016

Despite the tough operating environment, the South African travel and tourism industry experienced slightly better than normal business performance in the last quarter of 2016. By Kagiso Mosue.

Against a normal performance score of 100, the industry recorded an index of 104,5 – slightly higher than the anticipated index of 81.7.

Although performance in this quarter was the best for 2016, overall 2016 performance was slightly below 2015, and continues the soft decline seen since the best years of 2013 when the average for the year was just below 110 – once again drawing attention to the challenges businesses are facing in the operating environment.

Specific business segment performance

In Q4 2016, the ‘Other Tourism Businesses’ segment (comprising of tour operators, coach operators, vehicle rental companies, airlines, travel agents, retail outlets, forex traders, conference venues and attractions) recorded better than normal performance with an index score of 116.1. This is significantly higher than the forecast score of 69.9. Meanwhile, the Accommodation segment performance was below normal levels with an index of 89.5 – a score that was notably also below the expected 109.4.

Contributing Factors

The cost of inputs once again featured prominently as the greatest negative contributing factor to performance (49% for Accommodation and 41% for Other Tourism Businesses), and it has remained one for the main negative contributing factors to business performance throughout 2016.

On the positive side, strong overseas leisure demand was cited in the Accommodation index as a positive contributing factor, but this was not significant enough to lift up the overall performance for both Accommodation and ‘Other Tourism Businesses’ segments.

Outlook for Q1 2017

Anticipated business performance for Q1 2017 is moderately low at an index of 96.0, reflecting a slightly depressed outlook. Performance for the Accommodation segment is expected to remain fairly flat, whilst the ‘Other Tourism Business’ segment looks forward to a continued positive run. Looking ahead to the rest of the year, the industry looks forward to a less turbulent year.

“There is no doubt that the major political and socio-economic developments that we saw unfold in 2016 will spill over to 2017. However, the TBCSA remains cautiously optimistic that travel and tourism will roll with the punches and that overall improvement in business performance will rise even further in the coming months,” says Mmatšatši Ramawela, CEO of the Tourism Business Council of South Africa (TBCSA).

About the author: Kagiso Mosue is the Corporate Communications Manager at the Tourism Business Council of South Africa (TBCSA).

About the Tourism Business Index: This information is designed to assist individual businesses, policy-makers, investors and all other relevant stakeholders, understand the travel and tourism operating environment. Th aim is to assist businesses to plan for the likely, future tourism environment.

Read More:
Download the TBI Q4 Executive Summary
Download the Full TBI Q4 2016 Report

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