Tourism decline bad for jobs
East London probably follows national drop in overseas visitors
Overseas tourists visiting South Africa dropped 6.3% year-onyear in the first quarter of 2019. Although there are no exact statistics for the Eastern Cape, it can be assumed that East London’s numbers will at least reflect the national downturn, or be worse, said Lara Hodes, an economist at Investec Bank Limited.
“International tourist numbers are gleaned mainly from international airports and road entry points, which leaves Eastern Cape at a slight disadvantage statistics-wise.”
Hodes said the dramatic decline is concerning as South Africa’s tourism sector is a vital conduit for growth and employment creation in the country. It also has sizeable spillover effects for other key segments of the economy, which includes the vital element of job creation.
Tourism accounted for 1.5 million jobs in 2017, 9.5% of total employment. Many of the jobs are in the vital unskilled categories, which only require on-the-job training or at best short-term in-house learning programmes. Given the poor schooling record of the huge parcel of unemployed youth, under-skilled workers can cope with tourist needs, provided they have the right attitude to service.
President Cyril Ramaphosa, in his State of the Nation Address in February, stated that tourism provided the country with “incredible opportunities to, quite literally, shine”.
Acknowledging that tourism performs better than many other industries, the president further stated that there is no reason that tourism employment shouldn’t double in size.
Had tourism continued to grow, adding jobs to the economy as it did in 2016 and 2017, the country should have been well on its way to meeting the president’s goal. The year-onyear reverse of 6.3% has knocked this prediction, according to Hodes’ research.
A worrying trend is that visitors from Europe, amongst the biggest spenders, are showing the largest decline. Germany is down 14.1%, France 9.65% and United Kingdom 4.9%. International visitors, despite having far lower numbers, were responsible for 44% (R121bn) of total tourism spend of R277bn in 2017, while domestic visitors contributed 56% (R115bn).
According to the World Travel and Tourism Council, travel and tourism account for 8% of world jobs.
“In order to propel stronger growth in the next few years, growth-enhancing policies need to be successfully implemented and continuously reviewed, driving a lift in business sentiment and as a consequence investment,” said Hodes.
“Two areas require immediate intervention. The lowering of regulatory barriers and consequently improving ease of entry remains key and this, together with addressing the significant issue of crime in the country, are paramount to attracting foreign visitors.”
Stats SA showed that the tourism sector was also the best, along with finance and service industries, in creating jobs, having added 64,000 between 2014–2017.
In 2017, 750,000 people, out of SA’s 16.2 million employed, were in tourism.
If the 6.3% decline continues, the big-spending overseas visitors, which account for the topend of travel, with the biggest visitor to worker ratio, will create massive job losses.
Visitors from Europe, amongst the biggest spenders, show the largest decline