Tourism sector suffers as credit crunch hits hotels
Confed Cup, Lions tour save June from negative growth
SOUTH AFRICA’S tourism sector is taking strain in the tough economic climate, with income from accommodation for the second quarter down 5.4 percent from the same time last year.
However, June was the only month so far this year which did not show negative growth, probably boosted by several sports events, such as the British and Irish Lions tour and the Fifa Confederations cup.
Statistics SA’s figures for the second quarter showed that while accommodation income for the quarter was down year on year, June’s income remained stable from last year. It was the first month this year in which negative growth was not recorded.
A report released by Deloitte this week indicates that a bumper sporting season in June was probably to thank for a rise of 5.8 percent in revenue per available room (RevPAR), a key performance indicator in the industry.
“The sporting events in June gave the hotel industry a welcome break from the declines and also provided South Africa with a practice run before the 2010 Fifa World Cup,” said Deloitte’s Tourism, Hospitality and Leisure leader, Moray Wilson.
“The country is no stranger to hosting sporting events but the World Cup will certainly be the biggest we have held in recent years. During the event, the country is aiming to welcome approximately 450 000 visitors and will certainly set up the framework for a very prosperous 2010 for the tourism industry.”
Major cities, such as Cape Town and Johannesburg, benefited the most from the recent football and rugby events. Revenue per available room in Cape Town jumped 14.2 percent breaking five consecutive months of RevPAR decline, despite only hosting two rugby matches. The jump was mostly due to a 10.6 percent increase in average room rates to R880 but occupancy also went up by 3.3 percent to 51.1 percent ending a 12-month cycle of occupancy decline.
Spokeswoman for the Tourism Business Council of South Africa, Kagiso Mosue, said members had been “hard hit” by the economic situation but “some recent events like the Indian Premier League, the Confederations Cup and the British and Irish Lions tour have helped to sustain our members”.
Wilson said the tourism industry still faced challenges as a result of tough economic times.
“There is no doubt that the South African tourism industry continues to be challenged by the global economic downturn and some tourists are being deterred by the strong rand against source market currencies.
“Data compiled by STR Global shows that the RevPAR is down 7.2 percent year-to-June 2009 and if this trend continues, 2009 could be the first year in 10 years that RevPAR has contracted,” Wilson said.
The Statistics SA figures back this up, showing the number of stay nights sold for the second quarter of 2009 decreased by 9.8 percent compared with the second quarter of 2008.
The main contributor to the decrease of 5.4 percent in the income from accommodation for the second quarter of 2009 compared with the second quarter of 2008 was hotels, with income dropping from R1.99 billion in the second quarter of 2008 to R1.86bn this year, a percentage drop of 6.6 percent.
Only caravan parks and campsites and guesthouses and guestfar ms showed positive income growth, with caravan parks and campsites climbing 8 percent and guesthouses and guestfarms showing 1.6 percent growth.
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