Business & Finance

Tourism Growth Key for SA and Car Rentals

South African tourism, exceeding over 10 million arrivals last year and its growing GDP contribution which now exceeds 9%, has demonstrated sustained growth well above the global industry norm.

Reflecting further on the extent of this performance, one is reminded that yet another record was broken, at the time, in 2010 during the hosting of the FIFA World Cup when over 8 million foreign visitors arrived in the country.

A labour-intensive industry, with a supply chain that links across multiple sectors, tourism was identified as a priority in the government’s planning and policy frameworks being as one of the six job drivers of the New Growth Path framework. The National Development Plan (NDP) also identified the need for critical actions to boost private investment in labour intensive areas and export earnings which is a typical feature of the tourism industry.

Aligned to the NDP, the National Tourism Sector Strategy, launched in 2011, aims to ensure the sector realises its full potential in terms of job creation, social inclusion, services exports and foreign exchange earnings. At its current levels, the tourism industry matches the gold sector however the National Department of Tourism expects tourism to grow from a baseline in 2009 of R189 billion to R499 billion by 2020.

SAVRALA (Southern African Vehicle Rental and Leasing Association) car rental members have also shown similar growth patterns in certain segments. The measured market, in 2013 at R4,7 billion in revenue, reported a 9% growth over the previous year and while rental volumes showed a very modest overall 2% growth, international customers grew by over 20%. However, these international customers are also price sensitive which was illustrated by a 10% reduction in rental period, to an average of 8 days, last year. More locally, unsurprising, with the increasing financial burden on households and the demise in the number of local low cost airline operators, the domestic leisure rental volumes decreased by 8% last year. While general business travel remains a key segment, the growth of both local and international visitors requiring car rental services and the many other related services, would see many new and much needed jobs being created in tourism.

As a long haul destination, South Africa competes in several key markets against other long haul destinations such as the Far East and Australasia. The cost and capacity of air access to South Africa, and the continent in general, is often the first challenge in efforts to try and ensure that tourism can take the necessary steps to achieve its ambitious targets.

While tourism has got a good story to tell, it’s critical that in five year’s time, we have a much better South African tourism legacy to look upon.

For more information on SAVRALA visit

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