South Africa’s Hotel and Tourism Sector Set for Steady Growth as Visitor Numbers Continue to Grow: PwC Outlook

The new visa regulations had a sharp impact on the South African tourism industry

JOHANNESBURG, South Africa, July 28, 2016/ -- South Africa’s hotel industry is set for steady growth in the next five years driven by an increase in the number of foreign visitors into the African continent. Pietro Calicchio, Industry leader of Hospitality & Gambling, PwC Southern Africa (www.PwC.com), says: “Although the South African economy has weakened considerably, the overall outlook for hotels in South Africa is expected to remain positive.” According to PwC’s 6th edition Hotels Outlook 2016 – 2020, revenue from hotel room accommodation in South Africa rose 8.1% in 2015 to R14.2 billion, reflecting an increase in stay unit nights and a 6.5% rise in the average room rate. Overall, hotel room revenue is projected to expand at a 7.8% compound annual rate to R20.6 billion in 2020. PwC’s report features information about hotel accommodation in South Africa, Nigeria, Mauritius, Kenya, and Tanzania. “The devaluation of the rand and the relaxation of certain visa regulations has had a positive impact on the tourism industry in South Africa, making the country a more attractive tourism destination. This has also had a positive impact on the number of foreign visitors to South Africa over the past six months,” says Calicchio. The new visa regulations had a sharp impact on the South African tourism industry. After growing at an 8% compound annual rate between 2009 and 2013, the number of foreign overnight visitors rose only 0.2% in 2014 before falling 6.8% in 2015 – the biggest decline in six years, according to official statistics. China had the largest decrease of 46% in 2014, while the decrease from India was 23.5%. Visits from China edged up 2.2% in 2015, but remained 45% lower than the peak in 2013, while visits from India fell an additional 8.5% in 2015 for a cumulative 30% decline over the past two years. A key factor cited as contributing to the decline was the requirement that foreign travellers appear in person at South African embassies to have their biometric information taken. However, some countries such as India, Russia and China have very few South African visa processing centres. In October 2015, some of these regulations were eased and the Department of Home Affairs is considering introducing further amendments. Overall, in 2015 there was a decline in the number of foreign travellers to South Africa from every region except the Middle East and North Africa. Of non-African countries, the UK is still the largest source of visitors to South Africa at 407 486 in 2015, an increase of 1.4%. It was one of the few countries from where visitors increased in 2015, but that gain did not offset the overall 6.8% decline from 2014. Visits from the US dipped below 300 000 in 2015, down 3.9% from 2014. Germany was down 6.5% in 2015, while Australia fell 10.8%. Of African countries, the largest numbers of foreign visitors to South Africa in 2015 came from Zimbabwe (2.1 million), followed by Lesotho (1.5 million) and Mozambique (1.3 million) but all were lower than in 2014. On a more positive note, the number of monthly overnight tourist visitors to South Africa started picking up towards the end of 2015 and rose above the one million mark for the first time in January 2016, with international visitor numbers up by 16.8% for the months of January to April 2016 when compared to the same period in 2015. Visitor numbers from Europe have increased by 13.6%, China 38.0% and North America 16.4% through to April 2016 when compared to the first four months of 2015. For 2016 as a whole, a 12.4% increase in foreign visitors is anticipated. Hotel accommodation: South Africa – Nigeria – Mauritius – Kenya - Tanzania The number of hotel rooms planned in Africa has increased from prior years in the wake of a number of developments across the continent. Overall, room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 6.7% in 2015, the largest gain since 2011. Tanzania had the largest increase with a 14.4% gain, the result of a large increase in the average room rate that offset a drop in stay unit nights. “It is promising to see a growing number of new hotels that are planned for the South African market over the next five years. We are forecasting an additional 2 600 hotel rooms to be added over the next five years,” says Calicchio. “We forecast that hotel room revenue will grow by 11.9% in 2016 to R15.8 billion.” The interest in new hotel developments in Cape Town reflects its strong growth rates and its appeal as a tourist attraction. Five-star hotels had the highest occupancy rates in the market at 79.5% in 2015, up from 70.7% in 2014 as stay unit nights increased by 12.5%. The hotel sector in Mauritius experienced an increase in stay unit nights in 2015, but a drop in the average room rate that resulted in a 6.7% increase in room revenue. Nigeria’s long-term prospects for the hospitality sector remain positive, though the impact of its current weaker economy is likely to reflect in near-term hotel performance. Kenya’s economic growth has been strong and a number of initiatives have contributed to a recent increase in the tourism industry. South Africa: The Outlook (2016 – 2020) With occupancy rates and visitor numbers on the rise, there is renewed activity in the hotel sector. There are a number of major hotels expected to open in the next five years and several others in the planning stage. The number of available hotel rooms are projected to rise at a 0.8% compound annual rate to 63 700 in 2020 from 61 100 in 2015. Stay unit nights are expected to increase at a 1.9% compound annual rate to 14.6 million in 2020 from 13.3 million in 2015. With stay unit nights growing faster than room supply, the occupancy rate for hotels is forecast to rise from 59.6% in 2015 to 62.6% in 2020. Nigeria – Mauritius – Kenya –Tanzania: The Outlook (2016 – 2020) The hotel market in Nigeria has not fared as well as South Africa with stay unit nights dropping 12% and room revenue down by 3.6% over the past two years. There are a number of new hotels planned or under construction and we forecast an additional 4 700 rooms to be added in Nigeria during the next five years. Hotel room revenue is expected to grow to US$ 507 million in 2020 from the US$321 million achieved in 2015, due to increases in both stay unit nights and average room rates. The number of tourist arrivals to Mauritius increased by 10.9% in 2015, the largest increase during the past five years. The number of available hotel rooms is expected to increase at a 2.8% compound annual rate, rising to 15 600 in 2020 with hotel room revenue forecast to grow at a 10.6% compound annual rate to Euro 920 million in 2020 . Kenya’s hotel market is recovering, with growth being achieved for the first time in four years due to an increase in the average room rate even though stay units fell 2.8% in 2015. Revenue is projected to grow at 6.1% compounded annually to 2020. Tanzania’s hotel room revenue amounted to US$222 million in 2015 and is expected to grow by 10.8% compounded annually to US$371 million in 2020. “The hotel market in each country is affected by both the local and global economy, with some countries being more dependent on foreign visitors than others. The growth forecast is therefore dependent on how well both the local and global economy performs and grows over the next five years.” “The tourism industry continues to be one of the fastest growing sectors of Africa’s economy. In spite of recent challenges, including the change in visa regulations in South Africa and the contraction of the global economy, the sector has significant potential to create jobs and uplift inclusive economic growth across the continent”, concludes Calicchio.

Travels with Jimbabs: If you have not cruised, you have not lived —Nwako...

Travels with Jimbabs: If you have not cruised, you have not lived —Nwako...: Mrs. Tinuke Nwakohu, Managing Director of Aviator Travels and Tours, holds a Masters Degree in Law from Kings College, University...

If you have not cruised, you have not lived —Nwakohu

Mrs. Tinuke Nwakohu, Managing Director of Aviator Travels and Tours, holds a Masters Degree in Law from Kings College, University of London. She has over eighteen years banking experience where she was exposed to various departments within the bank which included treasury, administration and legal department.

The Legal Department exposed her to the practice of aviation law from where she developed her passion for the travel industry. A considerable part of her banking career was also dedicated to providing private banking products to high network individuals and upwardly mobile individuals.

She is therefore accustomed to high service standard which she has brought to Aviator.

In this interview with JIMOH BABATUNDE, this lawyer turned travel consultant shared her travel experiences.

Here is an excerpt

FIRST holiday memory:

I have been travelling since I was a child, so I have made many trips outside the country, but the one that stands out is my trip to Dubai in the 80s. Dubai It was just a fallow land . It was all sand , nothing much. I liked it, though the heat was unbearable, but I loved it.

Subsequent travel to Dubai has been interesting , the change and the newness of the city . So, each time I go to Dubai, there is this excitement I feel. Dubai is the only place I can say where I go that I really love and it is a city I can go to every other week.

Reasons for the love of Dubai.

It is the newness, the comfort, the fact that you have fantastic hotels, the fact that you do not have to rely on anybody to move around and it is a safe country. There is nothing you need there that you will not get. It is a city you can get good and cheap hotels. If you want entertainment or shopping. You have them in Dubai .

Dubai is now a city that boasts unmatched hotels, remarkable architecture and world-class entertainment and sporting events. The beautiful Burj Al Arab hotel presiding over the coastline of Jumeira beach is the world’s only hotel with a seven star rating.

The Emirates Towers are one of the many structures that remind us of the commercial confidence in a city that expands at a remarkable rate. Standing 350 meters high, the office tower is the tallest building in the Middle East and Europe.

In Dubai you do not need to know anybody to pick your bag to be there and you will still feel at home. These are some of the reasons I love Dubai, because of the freedom.

Other destinations loved:

I love Cape town. It reminds me of the suburbs of United Kingdom, it is like a country side. It has everything but in a different way , I find it more homely. I love the views and scenery. The hotels are fantastic.

There are lots of things you can do and when you are going on the garden route , it is just beautiful and the fact that you are in Africa is another thing that thrills me, that this is actually Africa and not Europe .

Just like Dubai, whatever you can get in Europe, you can get in Cape Town. The city is so cosmopolitan, you can go there and feel free, but not like in Dubai.

It is also a city that is bubbling and so many exciting things to do. The weather is good ,it is not extremely cold or extremely hot.

On choice of hotels:

What determines my choices of hotels is a spa and tea making facilities. The beds must be comfortable that when you lie on it, the sleep will just come no matter what your worries are.

So those are the things I look for, I wake up in the morning, go to the spa, I used to be a gym person, but no longer, because I value being pampered.

On her best hotel:

This is another tough one. I have stayed in many good hotels. I love the Radisson in Cape Town. I stayed in Maslow in Jo’burg . I love that as well. In Dubai there are so many good hotels . The one that stood out is the Sheraton at Dubai airport, beautiful with spa facility.

Though I am not a food person, but I look out for what they have on offer . I am more of a tea person. I love the Hilton in Dubai too, the break fast is great. In any city I visit, I do not stay in any hotel twice, I move to discover more hotels.

On what she packs while travelling:

First and foremost my laptop, my Ipad , I can not do without that. Also depending on the hotel I am staying, my toiletries come next . Then I check out the weather in my destination to determine if to pack warm clothings or not. Those are the important things apart from my shopping money.

Business or leisure travelling:

For me, it is now difficult to say I am travelling for leisure, there is always element of business in my travels. What I do sometimes is to go for two days to a country like Croatia or Greece. Why do I do that?.

I do it to see what the place looks like, so that if I am selling to my clients I know what to tell them. I am looking at going to Portugal and Bucharest in Hungary next, I have never been there before. It is to see the places for business, but there is leisure tied to it as I go round the city to see what it looks like too. So, for me it is always a mixture of business and leisure.

On her cruise experience :

I have always enjoyed cruising, I have been on different cruise lines, but Harmony of the Sea stands out. This is a cruise line that has everything on board for entertainment, for leisure, culinary. Harmony of the Seas, sets the stage for an entertainment line up like you have never seen. From a Broadway hit musical to beyond state of the art technology over the ice rink, to high-flying daredevils in the AquaTheater.

It is the largest cruise ship in the world now, measuring more than four football pitches in length with a maximum capacity for 6,780 passengers.

This cruise line has enhancement over the Allure of the sea, the extra thing it has is in the area of entertainment, the rooms are spacious, the food also amazing as there were varieties. Even I whom am not a food person ate on board. Whoever has never cruised has never lived. You need to cruise to understand the beauty of it.

Read more at: http://www.vanguardngr.com/2016/07/not-cruised-not-lived-nwakohu/