South Africa’s decline in foreign tourist arrivals experienced over the first quarter of this year is the worst decline in more than two decades, Grant Thornton has warned.
Lee-Anne Bac, Director, Advisory Services at Grant Thornton says: “A loss of this magnitude in foreign tourist arrivals is unprecedented. We have never seen such dire levels of decline in the last 21 years of our tourism history.”
According to the firm, the decline comes on the back of the Ebola pandemic in West Africa, economic decline in some source countries and the implementation of South Africa’s new immigration regulations.
“The 6% decline recorded in foreign tourist arrivals for the first three months of 2015 equates to a loss of 150 000 tourists compared with the same period last year. This is a decline of 1 600 tourists – or four jumbo jets – per day,” says Bac.
This comes at a time when South Africa’s weak currency should be a factor that encourages foreign tourism.
Grant Thornton Advisory Services calculates the direct spend lost to the South African economy as a result of the 150 000 tourist decline, to be R1.6 billion. Bac adds that this loss of foreign tourists excludes the levels of growth that South Africa should have experienced during the same period.
“If we had experienced modest growth of 5% for the quarter, then the total number of foreign tourist arrivals to end March 2015 would have been 2.6 million. So, if we include the expected growth expectations in our estimations, South Africa actually lost 265 000 foreign tourists (and not 150 000) in the first three months of the year and therefore the loss of direct spend in our economy (Foreign Direct Investment) would have been R2.8 billion,” she continues.
Bac also points out that this decline is more than the drop experienced during the recession, when South Africa recorded a 2.5% drop in tourist arrivals for the same period. “When comparing our recessional years to our current situation, it’s a big shock.
“Based on global tourism forecasts for 2015, South Africa should not be experiencing these levels of decline,” says Bac. “South Africa appears to be ‘bucking the global trend’ at the moment.”
She cautions that there will be far-reaching implications resulting from this dramatic decline, and most notably a price squeeze will result as tourism product owners fight for a shrinking foreign tourism market and a price-sensitive domestic market. “There will most definitely also be job losses, especially in niche tourism operators that focus on specific foreign tourism markets i.e. China and India,” says Bac.