Festive holiday season loading for SA as income from accommodation sharply up

22 Nov 2022

The tourism accommodation industry has seen a sharp year-on-year increase, which bodes well for the festive season — the first Covid-free holiday since 2019.

StatsSA has published its preliminary tourist accommodation statistics, showing that total income for tourist accommodation — measured at current prices — was up almost 80% in September compared with the same period last year.

Income from accommodation has risen by 56% YoY, the result of a 35% increase in the number of stay unit nights sold, and a 16% increase in the average income per stay unit night sold.

The biggest contributors to the YoY increase were hotels (up 91% and contributing 38 percentage points); and “other” accommodation including lodges, bed-and-breakfasts, self-catering establishments and other non-hotel establishments (30% and contributing 15 percentage points).

Income from accommodation — which excludes restaurant, bar sales and other income — increased by 84% in the third quarter of 2022 compared with the third quarter of 2021. Again, the main contributors to this were hotels (135% and contributing 51.9 percentage points), and “other” accommodation (52% and contributing 27 percentage points).

At current prices, income generated from accommodation is still well below pre-Covid levels: in September 2019, the sector generated R2.8-billion, compared to R2.043-billion in September 2022, but the trend indicates a steep month-on-month increase since the sheer drop-off of March 2020.

Caravan parks and camping sites have lost 18% income YoY, with the average cost per stay per night now R762, compared to R963 in May this year, with occupancy down from 40.4% in May to 34.1% in September.

Income from accommodation is down 21.5% YoY, which begs the question: might camping be going out of fashion, now that Covid restrictions have been lifted? However, income from bars and restaurants on site is up a healthy 13% in September (from 8.7% in August).

On the up and up

This will be the first Covid restriction-free summer since 2019 and small business owners certainly have reason to be positive.

Small business platform Xero says its survey found 74% of small business owners in the SA tourism sector are feeling optimistic, but they have some way to go, as 77% experienced at least a 21% drop in revenue over the past two years.

A third said a lack of financial skills was their biggest problem, with 35% calling for more government investment in helping them with digital skills and innovation.

The research was conducted by Censuswide among 150 small business owners in the tourism sector across SA last month.

Colin Timmis, country manager at Xero, said there is much riding on this high season.

“The sector is a big contributor to GDP and a third of those we surveyed are looking to hire in the next 12 months. But small businesses won’t be able to grow without more support in key areas like digitisation, financial management, load shedding and reducing late payments from big businesses.”

More than a quarter (27%) of small business owners hoped to see more effort from the government to attract more tourists to the country this peak season.

Most small business owners (96%) said that disruption from power outages this year has had a negative impact on them. Big businesses are continuing to flout agreed payment terms, with 35% of tourism businesses experiencing late payments month on month.

Flying the flag

Meanwhile, in KwaZulu-Natal, North Coast businesses are hoping to cash in this season, with reports that eThekwini beaches had lost their Blue Flag status. In the heat of summer, visitors will want to cool off, and if Durban’s beaches are too polluted to visit, coastal towns to the north and south will happily cash in on the extra business.

The Wildlife and Environment Society of SA recently announced that three of the North Coast’s most popular beaches — Blythedale, Thompson’s Bay and Willard Beach — have been awarded Blue Flag status.

The Ballito Urban Improvement Precinct (UIP), supported by local residential estates, oversees a weekly water quality testing regime on eight beaches and four tidal pools in the area, to assure visitors that the beaches are safe.

Jade Harding of the Ballito UIP says that they aim to ensure “ideal” rated water quality for swimming, surfing and other ocean activities.

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“ ‘Ideal’ is the highest ranking a beach can receive and relates to the level of colony-forming units [CFUs] per 100ml. E. coli is a well-known example of a CFU.”

“Ideal” levels are classified as less than 250 CFUs/100ml, while “Acceptable” is between 250-500. “Poor” is above 500, with “Critical” levels exceeding 2,900.

Most beaches on the northern coastline currently rank in the “ideal” category.

The UIP says although rainfall, sea currents, strong winds and high seas can cause test results to vary, the trend is most critical. Their testing programme is run independently and the results are available publicly through the Ballito UIP, in line with the global best practice and World Health Organization guidance.

In Cape Town, James Vos, the City’s Mayco Member for Economic Growth, has also celebrated an uptick in tourist numbers, saying they were expecting 184 international flights per week over the December period, which will increase to 191 flights per week between January and March next year.

This amounts to about 1.5 million two-way seats between next month and March, generating R7.9-billion in tourism spend. BM/DM

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On the up and up

Flying the flag