Dec 19

Tourism – South Africa’s New Gold

An Article By Ian Kilbride.

It may come as a surprise to learn that the South African tourism industry employs ten times the number of people than that of gold mining. In fact, tourism employs more than twice the number of people in the entire South African mining sector. Tourism not only provides in excess of one million direct and indirect local jobs, or 9,2% of total formal employment. The sector is extraordinarily employment generative too, with one job created for every 16-30 visitors. Placed in macro-economic perspective, the entire sector contributes some 8,6% to the nation’s GDP. Tourism is truly South Africa’s new gold, but with a number of additional benefits.

The first and most obvious benefit of tourism is that it is entirely renewable and sustainable. Indeed, with the exception of the Covid lockdown years, both international and local tourist numbers to South Africa have grown steadily for the past two decades. In fact, 2023 to date has been a bumper tourism year, with some four million tourist arrivals in the first six months, representing a whopping 78% increase over the same period in 2022. Yet, we are still only operating at 80% of the pre-pandemic arrivals, so still have some way to go. While visitors from Africa remain the vast majority of tourists and many come here simply to shop, growth in UK, Europe and the US visitors remains encouraging. Visitors from Australasia have shown welcome signs of growth too, although this was prior to the rugby world cup final.

So, why is South Africa so popular with tourists? Geographically, we have both advantages and disadvantages. On the plus side, as a southern hemisphere country we attract tourists during the winter of the developed and developing north. On this point, we are still not attracting anything like the numbers of Asian tourists required to grow the sector and China’s economic slowdown due to the Covid pandemic has pulled up the handbrake on this potentially rich source of untapped tourism. But our geographical position also places us at the disadvantage of being a long-haul destination, albeit with convenient time zones for European travellers in particular.

The second key advantage we enjoy is the enormous variety of tourism we offer, not just ‘destination’ tourism. South Africa is broadening its ecotourism offering beyond safaris and wildlife and is developing a global reputation for event tourism, conference and business tourism, cultural tourism, adventure tourism, pink tourism, food and wine tourism and even dark tourism featuring the history of apartheid. Of course, language and shared heritage roots with many European visitors is a particular advantage.

The third advantage is simple economics. Despite its distance as a destination, given the weakness of the Rand, South Africa remains relatively cheap for the northern hemisphere tourist, particularly those making use of more self-catering type facilities.

Moreover, unlike the tourism and hospitality sectors of Europe and the US, both of which are suffering from skills and labour shortages, South Africa has an abundance of (young) labour, ready, willing and able to take up positions in this growing sector.

But, there are challenges that need to be addressed. The first is simply to grow the industry significantly. Despite all the advantages enumerated above, South Africa ranks a lowly 45th globally in the size of its tourism market and a mere 62nd in the World Economic Forum tourism competitiveness tables. As a long-haul destination, the costs associated with travelling to and from the country are set to escalate even further. The associated pressures to reduce the greenhouse gas emissions and carbon footprint of long-haul destinations are yet to be felt, but need to be accounted for and mitigated. Relatedly, South Africa is susceptible to the impact of climate change and water scarcity as Cape Town’s threatened day zero proved in 2016. The country is set to experience the looming impact of El Nino from 2024 and the local tourism sector must become more climate resilient and adaptive. This also means maintaining our beaches’ blue flag status and urgently fixing the disgraceful state of affairs on Durban’s coastline. Finally, of course, we have to tackle effectively the threat of crime to the tourism sector. It is one thing for Google maps to direct foreign tourists away from crime hot spots, but this is merely avoiding dealing with the critical underlying problem.

As a country, we need to approach tourism from a joined-up, whole of government perspective and view the industry from whole of society standpoint to protect, nurture and grow this wonderful endowment.