South Africa’s tourism industry looks set on the road to recovery as the income derived from accommodation rose markedly in May on the back of easing restrictions a month earlier.
However, economists have warned that the industry remains under severe income pressure, and still well below 2019 levels due to prevailing economic headwinds that may prevent its “full recovery”.
Data from Stats South Africa (StatsSA) yesterday showed that total income for the tourist accommodation industry increased by 86.6 percent in May year-on-year.
StatsSA said income from accommodation rose by 61.6 percent in May from a year ago, led by the surge in hotel stays.
Hotels recorded an occupancy rate of 34.7 percent in May, an increase to the reading in April of 33.8 percent but lower than the 37.5 percent reading in March.
On a year-on-year growth rate basis, total hotel sector income was a strong 114.9 percent, which was an acceleration on the April year-on-year growth of 83.3 percent.
FNB Commercial Property Finance property sector strategist John Loos said these very strong growth rates reflected an ongoing recovery in hotel income, however, they were coming off a low base when compared with 2020/early 2021 “lockdown” levels.
Total hotel industry income in May was still 19.15 lower than the income for May 2019, the last corresponding month prior to the 2020 lockdown announcement in March of that year.
Loos said that while incomes were expected to continue to improve gradually as the year progresses, the hotel sector was far from “fully-recovered” back to 2019 levels.
“The expectation of gradual improvement in 2022 to continue is on the back of Covid-19 seemingly having receded as a threat, and lockdown regulations gone.
“However, certain input cost increases may be reflected in this inflation increase, as the general inflation environment has deteriorated of late, so cost pressure for the hotel sector is likely also rising.”
In the three months ended May this year compared with the three months ended May 2021, income from accommodation increased by 59.2 percent boosted by hotels and “other” accommodation.
Investec economist Lara Hodes said the tourism industry continued on its positive trajectory following April’s severe flooding in KZN, a popular tourist destination.
“The lifting of the National State of Disaster in April, which has been in place since the onset of the pandemic is positive for the South African tourism sector and related sectors,” Hodes said.
“However, notwithstanding the robust pick-up in demand since the onset of the pandemic, occupancy rates remain below pre-Covid levels.”
BUSINESS REPORT