Cape Town - Business performance within the accommodation sector have surpassed forecast levels, the likes of which was last scene in 2013, according to the Tourism Business Council of South Africa's (TBCSA) Tourism Business Index.
TBCSA confirmed overall business performance levels in South Africa’s travel and tourism sector, notwithstanding the rising inflation and slow economic growth, have remained steady in the first quarter of 2016.
The report shows that businesses in the sector experienced almost normal business performance levels in Q1, recording an index score of 97.8, slightly below the score of 100, which would indicate normal performance levels.
TBCSA says it is important to note that this was above the anticipated index score of 94.6, which was forecasted in the last quarter.
Although there was a small decline in performance compared to Q4 2015, businesses in the sector performed closer to normal levels in this quarter, buoyed by strong performance in the accommodation sector.
Added to this, a W Hospitality Group Hotel Chain Development Pipeline Survey shows that the number of planned hotel rooms in Africa has soared to 64 000 in 365 hotels, up almost 30% on the previous year.
While the increase is largely down to strong growth in sub-Saharan Africa, which is up 42.1% on 2015, South Africa ranks in position nine of the hotel development pipelines in Africa list for 2016, just above Senegal - but all indicators show demand is there.
Delving deeper into the two main components that make up the TBI, the report shows that Q1 performance levels came in higher than expected in the accommodation segment at 119.3, compared to the anticipated index score of 100.8.
This is one of the strongest performances for this segment, only surpassed previously in Q1 2013.
On the back of this, it is interesting to note that the Cape Town Central City Improvement District (CCID) has released their annual 'The State of Cape Town Central City Report: 2015 – A year in review', which indicates that an estimated R8bn is expected to be invested in property in the CBD, and a further R1.6 billion of that pegged for hotel investment specifically.
Hotels are said to make up 8% overall of income generated from accommodation, according to the TBI report.
Commenting on the outcomes of the report, TBCSA CEO, Mmatšatši Ramawela, says it is clear from the results that businesses, particularly in other tourism sectors are facing pressures in the operating environment. However, she emphasised that overall the travel and tourism still fared far better than other economic sectors in the first quarter of the year.
“This is the second lowest Q1 TBI score recorded since 2011, but when we compare our results with other recognised economic indices in the country, it is quite apparent that travel and tourism remains far more resilient which is very comforting and encouraging”.