South Africa Tourism Report Q2 2010

The South Africa Tourism Report provides industry professionals and strategists, corporate analysts, tourism associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Africa's tourism industry.

Tourism Overview
Growth in foreign tourist arrivals is estimated to have slowed in 2009 for the third consecutive year. The most recent official data, for the first 11 months of 2009, show the number of arrivals increased by 4.4% year-on-year (y-o-y). Although most major source markets in Africa recorded positive growth in visitor numbers, foreign arrivals from other important source regions remained very weak. Arrivals from Africa were up by a relatively favourable 7% y-o-y in January-November 2009, but arrivals from Zimbabwe increased by 29% y-o-y, a rise of nearly 320,000 people. Again, we note with caution that this represented a massive 69% of the total net rise in numbers from Africa. Arrivals from Europe, North America and Australasia fell by almost 5%, 11% and 7% y-o-y respectively.

Hospitality
The most recent data show a relatively sharp downturn in the hospitality sector in 2009, although figures also show an improving trend. The total number of foreign and domestic tourist room nights in all accommodation establishments decreased by just over 8% y-o-y in 2009. In Q409, the number of room nights fell by 5% y-o-y, which is a broad improvement compared with previous quarters. In Q309, room nights fell by 8.2% y-o-y, while in Q209 and Q109 the number of nights declined by 9.8% and 9.5% respectively. Despite the downturn in the sector, BMI remains bullish about the future prospects for the South African accommodation industry, with domestic and international travel set to increase from 2010.

Forecast Scenario
Based on almost complete data for last year, BMI has revised up its estimate for total foreign tourist arrivals in 2009 and we now predict an increase of 4.6% y-o-y. The slowdown in growth in arrivals in 2009 is based mainly on recession in major source markets, particularly the eurozone. We also continue to doubt the tourist status of all the arrivals from Zimbabwe, particularly since the increase in arrivals from there during January-November 2009 accounted for 84% of the total net rise in arrivals to South Africa. For 2010, we forecast that growth in tourist arrivals and tourism receipts will pick up sharply as South Africa hosts the 2010 FIFA World Cup and economic recovery occurs in key source markets. Short-term weakness of the rand against the US dollar and the euro is also forecast, helping the tourism industry.

2010 World Cup
By January 2010, 2mn tickets had been sold for the World Cup, out of more than 3mn tickets to be sold in five sales phases. In the third phase of sales there was huge interest from South African residents, who accounted for 79% of total applications, up sharply compared to earlier sales phases. Apart from the host country, other key countries making applications were the US, the UK, Australia, Mexico, Germany and Brazil. There was also increased interest from neighbouring countries such as Botswana, Mozambique and Namibia. In February 2010, the government said preparations for the World Cup were on course for completion on time and dismissed reports that some airports may not be ready for the tournament.

Sun International
For the six months ending 31 December 2009, South Africa’s leading hotel and casino company Sun International posted a modest 2% y-o-y increase in revenue to ZAR4.1bn. Overall occupancy was 70%, down by 9% y-o-y due to weaker international, group and conventions demand. The company said trading conditions were stabilising and some growth in revenue was forecast for the remainder of the financial year, partly due to the anticipated benefits of the World Cup. SHOW LESS READ MORE >

Executive Summary

SWOT Analysis
South Africa Tourism SWOT
South Africa Political SWOT
South Africa Economic SWOT
South Africa Business Environment SWOT

Industry Forecast Scenario
Arrivals
Table: Arrivals Data, 2005-2014
Accommodation
Table: Accommodation Data, 2006-2014
Expenditure
Table: Expenditure Data, 2006-2014
Inbound Tourism
Table: Tourist Arrivals By Region, 2006-2014
Table: Tourist Arrivals By Country, 2006-2014
Outbound Tourism
Table: Outbound Tourism Data, 2006-2014
The ‘World Cup Effect’
Table: Key Tourism Source Markets Participating In The 2010 World Cup
Table: Number Of Beds Required In Each Host City For FIFA 2010 World Cup Games

Market Overview – Travel

Airports
Commercial Airlines
Special Focus: Jet Fuel Costs
Global Oil Products Price Outlook
Table: Oil Product Price Assumptions, Q409-Q410 (US$/bbl)
Table: Oil Product Price Forecasts (US$/bbl)
Car Rental
Market Overview – Hospitality
Accommodation Developments
Casinos
Table: Key Players In South Africa’s Hotel & Gaming Industry
Game Lodges
Regional Case Study – Accor
Table: Accor Hotel Business In Selected Middle Eastern And African Countries, June 2009

Business Environment Outlook

Middle East And Africa Tourism Business Environment Ratings
Table: Middle East And Africa Travel And Tourism Business Environment Ratings
BMI’s Security Ratings
Table: Middle East And Africa Defence And Security Ratings
Table: Middle East And North Africa State Terrorism Vulnerability Index
South Africa’s Security Rating
Conflict Risk
Terrorism Risk
Physical Safety Risk
Middle East And Africa Security Overview
City Terrorism
Table: BMI’s Africa City Terrorism Index
Special Report: Crime
Currency Forecast
Rand: Driven By Dollar Weakness
Table: BMI’s South Africa Currency Forecasts

Global Assumptions

Table: Global And Regional Real GDP Growth, 2008-2011 (%)
Table: Global Assumptions, 2008-2014
Table: Developed Market Exchange Rates, 2008-2011 (average)
Table: Emerging Market Exchange Rates, 2008-2011 (average)

Company Profiles

South African Airways
Sun International
Southern Sun

BMI Methodology

How We Generate Our Industry Forecasts
Tourism Industry
Tourism Ratings – Methodology
Table: Tourism Business Environment Indicators
Table: Weighting of Components
City Terrorism Ratings
Methodological Overview
Table: Methodology
Sources

- South African Airways
- Sun International
- Southern Sun