The overall occupancy rate for tourism accommodation in South Africa was still lower during the recent December peak season than before the pandemic, the latest data from Statistics SA shows.
Overall occupancy was 39.3% across all tourism accommodation types in December 2022. This is 12 percentage points lower than before the pandemic in December 2019, according to Lee-Ann Bac, director at the specialist tourism unit of international consulting firm BDO.
"Simultaneously, the number of available rooms or accommodation units increased by 10 000 compared to 2019. So more product has entered the market, but demand is yet to return to 2019 levels," Bac points out.
Hotels achieved occupancy of only 41.4% in December 2022, 19% below December 2019. Hotel price increases since before the pandemic have barely beaten inflation and left total hotel revenue this past December at 12% below that of December 2019.
A trend Bac picked up from the data is that across all tourism accommodation types, income recovery from restaurants and bars has outpaced accommodation revenue.
"This shows the work put in by the industry in improving and expanding restaurant and bar offerings are paying dividends. The accommodation sector has awakened to the importance of food and beverage in their business model," says Bac.
"This has become important, not just for overnight guests but for the broader local market. There is a strong move away from 'limited service' accommodation, shown in the numbers."
Although a small component of the tourism accommodation sector, caravan and camping facilities fared well, in December 2022, in her view, with 65% average occupancy. Guesthouses and guest farms, on the other hand, did not do well in terms of occupancy - 26.8% compared to 41.6% before the pandemic.
"For SA's tourism accommodation sector to recover and grow, we need strong economic growth so South Africans will have sufficient disposable income to not only go on holiday but to stay at places like hotels and guesthouses," says Bac.
"The return of all overseas markets to our shores is also needed. We can't rely only on a few key markets. We need strong growth from all markets, including growth from and appreciation of other African markets."
A return of business travel and growth in the events industry are further key aspects needed to boost the tourism accommodation sector.
Investec economist Lara Hodes points out that tourist numbers in SA were up 152.6% year-on-year in 2022.
"Specifically, those emanating from 'overseas' countries rose by 284.0% y/y, with travellers from Europe making up the largest share (around 62.1%)," says Hodes.
Travellers from the UK reached 283 031 in 2022, followed by Germany (173 146), the Netherlands (90 289), and France (76 077). Moreover, tourists from other African nations rose by 126.2% y/y in 2022, with those from SADC countries making up the majority.
"The tourism sector remains a key growth area for the country with the potential for significant job creation at all skill levels. Upgrading aging or damaged infrastructure, addressing crime, and reducing red tape (among others) remain key and are essential to attract investment into the sector and entice travellers," says Hodes.