Cape Town – While the weaker rand is good for inbound tourism this is vastly offset by the negative impact the S&P downgrade will have on the cost of local funding, inflation and restrictive economic growth.
This is the opinion expressed by Tsogo Sun CEO Marcel von Aulock on Tuesday. He added that the vast majority of the hotel infrastructure in SA survives off of domestic business and leisure travel.
"While the weaker rand is good for inbound tourism this is vastly offset by the negative impact this downgrade will have. It's a bad thing for the tourism industry and South Africa as a whole," he said.
South Africa's ratings downgrade by S&P could simultaneously be good and challenging for the local tourism industry, according to Enver Duminy, CEO of Cape Town Tourism.
The ratings agency downgraded SA's foreign currency essentially to junk status, mentioning last Friday's Cabinet reshuffle as one if its concerns.