Image: (C) Instagram @natassjy

The strengthening rand and Cape Town’s water crisis has impacted SA tourism in a major way.

For the past 12 months, South Africa welcomed 10,29 million foreign tourists (visitors who stayed overnight) in 2017. This is up only 2,4% over 2016.

Lee-Anne Bac, Director, advisory services at Grant Thornton says: “This increase is unfortunately underwhelming and significantly below the global average of 7%.”

The number of overseas tourists (2,7 million) is up 7,2% in 2017, this good growth was driven by excellent performance in the first half of the year.

Johannesburg, South Africa
Image: Alessio La Ruffa/Twenty20

In the fourth quarter of 2017, Stats SA reveals that the number of overseas tourists increased by only 3,7% – and this figure was driven down by a dismal increase of less than 1% in December 2017.

“We attribute the dramatic decline at the end of the year to the impact of the water crisis in Cape Town, coupled with South Africa’s strengthening currency,” continues Bac.

According to Stats SA, the number of African arrivals (7,6 million) is a mere 0,8% up in 2017 – driven by a significant decline in Q1 of 8%.

For the remaining three quarters of 2017, African arrivals increased by 5% (Q2), 3,7% (Q3) and 3,6% (Q4) respectively.

Cape Town, South Africa
Image: Tim Johnson/Unsplash

“Overall, this level of growth is not good enough for meaningful change and these numbers will not contribute towards sustaining economic transformation,” says Bac.

“We are encouraged however, by Minister Malusi Gigaba’s Budget speech this afternoon.

In particular we welcome the SA Tourism budget increase from R1,14bn to R1,23bn, an 8,2% increase – well ahead of inflation that will ‘enhance support for destination marketing’.”

Key source countries with low growth/declines in tourism numbers in 2017:

UK: 0% (no growth over 2016). As the UK is a significant source market, no growth from this market has a big impact on total arrival figures
New Zealand: down 24% in 2017. A clear indication of the impact of visa regulations on demand
Nigeria: down 22%
China: down 17% (eroding half the growth from this market in 2016)