News24.com | Domestic market not enough to fill the coronavirus gap for tourism accommodation, data shows thumbnail

News24.com | Domestic market not enough to fill the coronavirus gap for tourism accommodation, data shows

Occupancy rates at open hotels in SA have been steadily increasing. (Supplied)

Occupancy rates at open hotels in SA have been steadily increasing. (Supplied)

  • Measured at current prices – therefore in nominal terms – total income for the tourist accommodation industry decreased by 71.8% in September 2020 compared with September 2019.
  • At the same time seasonally adjusted income from accommodation increased by 56.7% month-on-month in September 2020 and by 98.6% month-on-month in August.
  • Tourism specialist Lee-Ann Bac of BDO foresees South Africans will likely choose self-drive options and shorter vacations – or even just staycations – this summer season.

The latest data reflects the massive decline which took place in the market due to the coronavirus lockdowns and impact.

Measured at current prices – therefore in nominal terms – total income for the tourist accommodation industry decreased by 71.8% in September 2020 compared with September 2019, Statistics SA announced on Monday. Income from accommodation decreased by 72.9% year-on-year in September 2020. According to Statistics SA, this is due to both fewer accommodation nights sold (down 65.3%) as well as a decrease in the average income per accommodation night sold (down 22.1%).

The largest year-on-year decreases in income from accommodation were reported by hotels (-78.6%) and guest-houses and guest-farms (-73.5%). Income from accommodation decreased by 81.8% in the third quarter of 2020 compared with the third quarter of 2019.

At the same time seasonally adjusted income from accommodation increased by 56.7% month-on-month in September 2020 and by 98.6% month-on-month in August.

Tourism specialist Lee-Ann Bac of BDO points out that, although the pick up in numbers between August and September (which had some school holidays) is a good sign, it is still significantly down from last year.

Not filling the gap

“The latest tourism accommodation statistics show that domestic tourism is simply not filling the gap in the market,” says Bac.

She says data from Smith Travel Research (STR), which also reflects on the state of affairs in October, shows the lowest occupancy rate among open hotels in SA was in May (17%). It then steadily increased over the following months to 30% in October.

In October open hotels in the Free State had 56% occupancy, those in Limpopo 42%; in North West 48%; in the Eastern Cape 34%; in Gauteng 25%; in KZN 42% in the Western Cape 21% and in Mpumalanga 34%. The data, therefore, shows that the provinces closer to Gauteng are doing the best.

“For me this shows that the domestic market has been travelling, especially to KZN. Travellers were likely to drive and looking to go to more ‘spread out’ areas like the Drakensberg and along the coast, wanting to get away from city centres,” says Bac. 

Big loser

This is illustrated by indications that in October open hotels in Durban’s city centre had 37% occupancy. The big loser was, however, Cape Town, where open hotels in the city centre had only 18% occupancy. In Sandton open 4-star hotels had only 28% occupancy compared to 30% occupancy levels at 5-star hotels across the whole of Gauteng.

In her view, the low occupancy level among Cape Town city centre hotels in October was also due to the lack of demand from business travel and that there are no real international tourist numbers.

“We will see foreign tourists coming, which will be good for Cape Town, but it will still be subdued. So, accommodation establishments would need serious specials and an emphasis on safety protocols to attract visitors to City Centre areas,” says Bac.

“Therefore, it still looks like the summer season will be mainly a domestic one. Foreign tourist numbers will be small, we have to be realistic about that.” 

The problem with having mainly a domestic season, in her view, is that South Africans have limited disposable income, leading to shorter holidays with a preference for self-catering options. 

“I think the high demand will be for houses to rent so that families can self-isolate. I also do not think there will be a high demand for flying as people will opt to drive or simply stay at home on so-called staycations, maybe opting to go away for a weekend or just a short while,” says Bac.

“So, the tourism operators and accommodation establishments need to become creative to attract the local market and get those staying at home to go out and visit attractions.”

Jeremy Clayton, chairperson Fedhasa Western Cape, the latest data from Statistics SA confirm the negative impact of “ambiguous government messaging around leisure travel during lockdown level 4 and level 3 and that continued through November with the “red list” of countries from which travel were banned to SA.

“The massive occupancy decline has had a huge impact on job losses and the industry as a whole. We encourage government to rapidly engage with international counterparts, reduce prohibitive travel regulations and utilise common sense principles that will encourage safe and responsible travel,” says Clayton.

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