Overview: SA Tourism growth over the last decade

2016-03-30 15:40 - Louzel Lombard
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Cape Town - The importance of South African tourism industry, particularly its role in economic growth, job creation, attracting foreign exchange and its capacity to grow SA's GDP is vital.

In 2013 alone, for example, the number of persons employed in the tourism industry amounted to 4,5% of all employed persons in South Africa, providing jobs of all skill levels and in all areas of the country.

The tourism industry is also one of the most easily accessible industries for entrepreneurs. 

Over the past 10 years, South Africa's tourism industry has seen many ups and downs. The most recent changes and confusion around the visa regulations saw SA's tourism figures drop an overall 6.8% in 2015

Regardless of the drop, however, overall growth over the past 10 years is undeniable. 

The latest Tourism Satellite Account for South Africa report, released in February 2016, provides an overview of tourism’s contribution and role in three spheres, namely employment, attracting foreign exchange and economic growth. The data released by StatsSA stretches over 10 years, from 2004 to 2014.

In terms of employment, in 2005, 475 664 individuals were directly employed in the tourism sector. In 2014, this number was raised by 205 153 to 680 817 individuals employed.

Comparable employment data from 2008 shows that tourism added more jobs to the economy than other industries such as trade, agriculture and manufacturing.

The following chart gives a clear comparison of which industries provided to most employment in 2014, compared to 2008. The tourism sector, as shown, provided 48 000 new jobs. 

Of the total employed in South Africa, including both formal and informal sectors, 1 in 25 individuals work in the tourism sector. To be more precise, 4,5% of the total workforce were directly employed in the sector during 2014. This is an increase from the 3,8% recorded for 2005, StatsSA found. 

When tourists enter SA, it's a given they will spend money here, and attracting that foreign exchange through inbound tourism is an attractive goal for SA.

In 2014 alone, for example, the V&A Waterfront, SA's most popular tourist attraction which attracts over 24 million visitors each year, contributed around R52 billion to South Africa’s GDP alone. 

READ MORE HERE: V&A Waterfront named Destination finalist in Global Tourism for Tomorrow Awards

The same way money is brought into the country by foreign visitors, money is also taken out by local citizens visiting foreign destinations as tourists. The difference between these two, between inbound tourism expenditure and outbound tourism expenditure, is known as the tourism trade balance with the rest of the world.

South Africa’s tourism trade balance with the rest of the world has remained positive since 2005. More foreign exchange has been earned than what has been lost due to tourism.

During the 10 years, ups and downs were recorded. The trade balance decreased from R23 778 million in 2007 to R9 970 million in 2010, after which it rose again to R38 311 million in 2014, StatsSA says.

A .1% decline in the role tourism plays as a source of economic growth was also recorded from 2005 to 2014. In 2014, tourism contributed 3% to the South African economy, down from 2005's 3.1%.

In totality the tourism sector's 3% contribution topped that of the Agricultural industry, which had a total contribution of 2.5% in 2014. 

Data from StatsSA also shows that the direct gross domestic product (GDP) from tourism was R103,6 billion in 2013, rising from R93,5 billion in 2012.

It shows that domestic visitors contributed 57% or R124,7 billion of total tourism spend in 2013, while international visitors contributed 43% - that's R94,2 billion. Total tourism spend in 2013 was R218,9 billion, a rise of 9,7% from R199,4 billion in 2012.

International and domestic visitors have different spending habits.

Simplified, for every R100 spent by an international visitor in 2013, R27 was spent on non-specific products, R15 on tourism-connected products, R14 on accommodation, R12 on road transport and R12 on air transport. R20 was spent on other products.

The major expenditure items for domestic visitors, on the other hand, is very different. For every R100 spent by a South African R29 is spent on road transport, R19 on non-specific products, R15 on accommodation, R14 on air transport and R10 on tourism-connected products. R13 was spent on other products.

During 2013, 14,3 million non-resident visitors visited South Africa, increasing from 13,1 million in 2012 and 12,1 million in 2011.

Statistics from 2014 onward are yet to be released, and should tell of the affects changes to the visa and travel documentation requirements have had on the South African tourism industry.

Short term statistics show that SA tourist arrivals were down 6.8% for 2015, compared to those arrivals recorded during 2014. This, mainly due to the confusion surrounding visa regulations says SA verification service Grant Thornton. 

Despite this, the tourism industry recovered well at the end of 2015, when foreign influx was spurred on by SA's weak rand. International arrivals during the final quarter of the year – from October to December – provided relief as South Africa significantly improved statistics and data.

READ MORE HERE: 2015 SA tourism figures drop 6.8%

The South African Departments of Home Affairs and Tourism has since announced that changes to ease the problematic visa regulations are on the cards, but these are yet to be rolled out and finalised. 

If you want to know more about these regulations, see SA's visa rules in review: 5 key developments to keep an eye on

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