Ina Opperman
Business Journalist
3 minute read
6 May 2022
4:33 pm

Tourism inching back to pre-pandemic levels

Ina Opperman

Now that people can travel again, is tourism getting back to pre-pandemic levels or is there still a lot of ground to cover?

Image: iStock

Tourism is inching back to pre-pandemic levels in South Africa, following the global trend of a firm recovery in the travel and tourism sector.

In 2020 the volume of tourists in South Africa decreased by 72,6% from 10,2 million in 2019 to 2,8 million in 2020.

According to Statistics South Africa, foreign arrivals decreased by 82.1%, from 1.5 million arrivals in December 2019 to 279 539 in December 2020, while only 26 880 were from Europe compared to 163 335 in December 2019,.

Despite travel restriction due to the second and third waves of Covid-19, 2.3 million international tourists arrived in South Africa during 2021 according to the UN World Tourism Organisation.

In February 2022, 310 173 tourists came into South Africa according to Statistics SA, with 93 899 from overseas.

ALSO READ: Pre-Covid glory days: SA tourism gearing up for foreign travellers

International travel takes off

The World Travel & Tourism Council (WTTC) forecasts a major increase in global international flight bookings as international travel takes off, starting with summer holiday travel to sun and sea destinations, such as the Caribbean and Latin America, with bookings already surpassing pre-pandemic levels.

Data for the first and second quarters of the year show triple-digit growth for inbound flight bookings around the world compared to last year as travellers are eager to spend more on travel following the loosening of restrictions.

Europe has seen a massive 350% surge in international arrivals in the first quarter compared to the first quarter of 2021, while Asia-Pacific countries experienced an increase in bookings of 275%. Tanzania, Qatar and Egypt are also getting close to pre-pandemic levels of travel.

The tourism sector in South Africa contributed 3,7% to GDP in 2019 and measured against other industries was larger than agriculture, utilities such as electricity, gas and water and construction. Tourism activities and their associated tourism expenditure directly contributed R209 billion to the national economy in 2019.

In 2019 the tourism sector directly employed 4,7% (773 533) of the total workforce, which translates to about 1 in every 21 employed individuals.

ALSO READ: Will government open its purse to aid the battered tourism sector?

Hotel sector still struggling

However, the hotel sector is still struggling to recover from the lockdown shock of 2020 although the year-on-year growth looks impressive, says John Loos, property sector strategist at FNB Commercial Property Finance.

The year-on-year growth rate basis for total hotel sector income in February this year was 175%, but this was from a very low base compared to the lockdown levels, which were still quite severe during the second wave of Covid-19.

Therefore, it makes more sense to view the total revenue value and compare it to the comparable pre-pandemic month in early 2020. According to the Statistics SA figures, total hotel industry income in February 2022 was still -33.9% below the income for February 2020.

In addition, the occupancy rates in February 2022 were 35.5%, still well below the 53.9% rate for February 2020.

Loos also points out that it is not only hotel income that is constrained, but the tourists as well, with the average hotel income per stay night in February 2022 still -23.1% down on the February 2020 level.

“The February hotel income numbers continue to show a hotel sector far from fully recovered back to 2019/early-2020 levels. We would expect gradual improvement in 2022 on the back of Covid-19 seemingly having receded as a threat, and lockdown regulations relaxed even further from late in 2021.”

ALSO READ: Enough already: Tourism sector and airlines won’t survive any more hiccups

Local travellers have little to spend on holidays

He says domestic holiday tourists as a group are more financially pressured than before Covid-19 due to the impact of the 2020 recession on employment and incomes, as well as increasing inflation and interest rates. Holiday tourism is non-essential and consumers cut this expense until their finances recover.

The business sector has also successfully “zoomified” much of its interaction during forced lockdowns and therefore business travel may therefore never return. He says hotel occupancy and income improvements were expected to continue in 2022, but the financial impact from the 2020 recession lingers and is a key drag on the pace of recovery.