Industryline

Robust domestic tourism sector increasingly important

Martin Jansen van Vuuren Martin Jansen van Vuuren

South Africa’s domestic tourism industry remains the engine of the country’s tourism sector, successfully sustaining most of its tourism products, especially in the accommodation sector.

Holiday makers, business travellers and those who travel for sport, entertainment, religion and medical purposes, or for conferences and exhibitions, are a huge component of our formal tourism sector activity.  Many hotels - in particular - derive as much as 80% to 100% of their business from the domestic market; a fact that is often overlooked when the national tourism industry market focus is on international tourism. 

While domestic tourism growth is constrained at present as South African consumers buckle under the economic pressures, it is still a huge market which contributes a significant portion to the overall industry.

Research indicates that South Africans took 24.5 million overnight trips during 2015 and while this figure is down around 12% on the previous year (2014), the domestic travellers contributed significantly to the success of tourism businesses, ranging from eateries to B&Bs. These overnight trips resulted in an estimated total direct spend of R23.6bn, while R68.2bn was spent by international travellers over the same period.

However, Grant Thornton believes there’s an undercount in these statistics, with business travellers adding a greater proportion of spend to the domestic tourist industry. So, while the current figures can provide a good indication of the trends and characteristics of the domestic tourism industry, the number of trips figure, and hence the direct spend, are probably underestimated.

At present, the industry is working with the Department of Tourism in order to effectively review all of the tourism statistics, including the domestic tourism data. Tourism Minister Derek Hanekom recently appointed a team of experts to recommend improvements to the collection and analysis of key tourism statistics in order to enhance decision making, including planning for growth in the tourism sector. Lee-Ann Bac – a Grant Thornton director – is a member of the Minister’s committee.

South Africa’s robust domestic tourism sector remains a significant contributor to our economy and the sector can and does prop up the industry during periods of international tourism stagnation or decline.

Government continues to increase its emphasis on this important market with the goal of making leisure travel available to all South Africans.  The Department of Tourism aims to promote domestic holiday taking as a “quality of life” activity for all which encourages South Africans to travel so that they can better understand and enjoy their country and their heritage. 

A vibrant domestic tourism industry is important because it enables a broader range of product to be available for our foreign markets – contributing to our increased competiveness in the international arena.  Few people know that attractions such as the V&A Waterfront in Cape Town are  in fact sustained by the domestic tourism market as much (if not more) than by the foreign markets.  Without domestic and local visitors we would not have such an iconic attraction available to the international holiday makers too.

Travel statistics for the first half of 2016 emphasise the resilience of the domestic sector as latest data reflects a steady increase in travel and points to somewhat of a recovery compared to 2015. Key indicators include:

  • Data from the Airports Company of SA (ACSA), shows that passengers arriving on domestic flights from January to May 2016 are up 8.9% at Cape Town and OR Tambo airports and up 9.8% in Durban compared to the same period last year.
  • Hotel occupancy has also recovered somewhat with STR Global statistics indicating that there has been a 3.9% increase in occupancy across all hotels for the period January to July 2016 compared to the same period in 2015.

Durban is a prime example of just how reliant on domestic travel a city’s economy can be as it derives as much as 80% of its tourism revenue from domestic travellers. Similarly domestic tourism contributes significantly to the local economy and the provision of jobs in most regions across the country. In fact very few hotels in South Africa have more international visitors than domestic stays.

Business travellers frequenting second- and third-tier cities such as Pietermaritzburg and Kimberly as well as rural towns underpin the economies of these areas.  Leisure travellers frequenting destinations within two hours’ drive of main metropolitan areas provide similar economic support for rural towns. 

This domestic support for hotels, airlines and other products and services is the underlying fabric that allows us to grow an international tourist industry because we have the support base that can sustain tourism operators and drive expansion while boosting investment.                       

Reaching a broader range of domestic travellers

When analysing South Africa’s domestic traveller, research indicates that there is a significant rise in the number of travellers from the growing black middle class who are increasingly taking to local holiday travel.

Statistics from car rental companies, ACSA and hotel surveys highlight this, while AMPS data, that breaks down the domestic market into racial and LSM groups, point to the fact that black people have moved into higher income groups with more disposable income.

Effectively exploiting the opportunities presented by a growing segment of domestic travellers, such as the development of new businesses, facilities, attractions (including new day trips and outings) can lead to the establishment of, and the investment in, a plethora of new attractions and services.

Scope for growth

SA Tourism’s “Sho’t Left” campaign which launched in June 2011 was very successful in encouraging a new generation of young and trendy South Africans to explore their own country. This drive to continue growing the domestic travel business is ongoing.

A reinvigorated Sho’t Left campaign is part of the extensive marketing drive by SA Tourism to increase domestic leisure travel, particularly during September which is Tourism Month. 

Many tourism businesses focus on international travellers yet nearly every town has a captive or potential domestic tourism or recreation market but local businesses are not always harnessing this enough to maximise revenue. 

Often, the industry forgets that they have attractions, services and products that they can market to domestic travellers first and foremost.  Sometimes this can start by tapping into the visiting friends and relatives markets or the business markets that already travel to a destination, and enticing them to visit tourism attractions and offerings.

There is a real opportunity to market the vast array of experiences and unique offerings to South African’s to convince them to travel in order to increase demand for tourism products and services and create a vibrant local citizen economy.

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