Hotels lead massive plunge in tourist accommodation

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Players within the tourism industry need to continue finding innovative ways to attract domestic travellers. (iStock)
Players within the tourism industry need to continue finding innovative ways to attract domestic travellers. (iStock)

The contraction in income derived from the tourist accommodation sector accelerated in February to -74.5% year-on-year compared to -51.8% y/y in December 2020, data released by Statistics SA shows.

The weakening was underpinned by a -60.6% y/y decline in the number of stay unit nights sold, coupled with a  -35.2% y/y slide in the average income per stay unit in February compared to -17.2% y/y in December, according to Investec economist Lara Hodes.

Hodes pointed out in a statement on Tuesday that all accommodation types experienced marked declines in February; however, the hotels category was largely responsible for the -74.5% y/y plunge. Occupancy rates were still at a significantly depressed level of 17.8% in February, according to Stats SA.

"Players within the tourism industry need to continue finding innovative ways to attract domestic travellers during this still uncertain period. The threat of new, more virulent strains of the virus and a lengthy vaccine rollout remain the key risks to the recovery of this essential economic sector," said Hodes.    

The data show that the number of travellers (both South African residents and foreign travellers) passing through SA's ports of entry or exit in February declined by -87.5% y/y to 385 832 individuals. Of these, 34% were SA residents, while the remaining 254 139 were foreign travellers.

"Looking at tourism numbers specifically, the number of foreign overnight visitors (tourists) plunged by a further -88.7% y/y in February, indicating that the devastating effects the pandemic continues to have on the local tourism industry, a significant employer with considerable spill over benefits for other industries," said Hodes.

"In the near-term, until the vaccine rollout gains momentum, South Africans are likely to remain relatively isolated, with few foreign travel destinations open to them." 

On the domestic front, she says leisure travel has subsided, following the pick-up in activity in the fourth quarter of 2020, which was supported by pent-up demand as lockdown restrictions were eased and the country headed into the festive period.

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