South Africa - Travel & Tourism: An infrastructure driven market (Strategy, Performance and Risk Analysis)
Total revenue in South Africa’s travel and tourism industry declined at CAGR of -7.2%, from 14.1 billion in 2012 to 10.4 billion in 2016. It will post a forecast-period CAGR of 4.8% to reach US$13.0 billion in 2021, supported by an increase in hotel revenue at a CAGR of 7.6%. Public private partnerships (PPPs) in national parks are a key driver of tourism and offer potential investors opportunities in adventure activities, eco-tourism properties, and retail propositions. In April 2017, Sanparks showcased 55 new investment opportunities in 10 of its national parks during an investment conference held in Sandton. In 2016, six million people visited 19 national parks in South Africa.
Robust infrastructure and adventure tourism are also helping to drive South Africa’s travel and tourism industry. The country’s tourism infrastructure has enabled it to host international events such as the 2003 Cricket World Cup, the 2007 T20 Cricket World Cup, and the 2010 FIFA World Cup.
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Domestic trips to drive tourist volumes
Total tourist volumes rose at a review-period CAGR of 2.9%, from 39.3 million in 2012 to 44.1 million in 2016. Volumes will post a forecast-period CAGR of 4.6% to reach 54.7 million in 2021. Growth is expected to be realized through government initiatives allocating funds to the industry; in 2016, it allocated US$7.5 million to the promotion of domestic tourism. The strengthening of currencies against the rand is encouraging South Africans to make more domestic trips. Domestic tourist volumes rose at a review-period CAGR of 2.9%, from 25.1 million in 2012 to 28.2 million in 2016 and will post a forecast-period CAGR of 4.6% to reach 35.0 million in 2021. Total international departures rose at a review-period CAGR of 2.3%, from 9.2 million in 2012 to 10.1 million in 2016. Departures will post a forecast-period CAGR of 4.4%, from 10.5 million in 2017 to 12.4 million in 2021. International arrivals rose at a review-period CAGR of 3.7%, from 5.0 million in 2012 to 5.8 million in 2016 and will post a forecast-period (2017-2021) CAGR of 4.8% to reach 7.3 million in 2021.
Increase in number of tourists to drive car rental fleet size
South Africa’s car rental fleet size rose at a review-period CAGR of 4.1%, from 58,706 in 2012 to 69,006 in 2016, and will post a forecast-period CAGR of 5.4% from 71,881 in 2017 to 88,835 in 2021, due to an increase in number of inbound business tourists.
New hotel establishments to drive revenue growth
Total revenue generated from hotels recorded a review-period CAGR of -4.3%, falling from US$1.9 billion in 2012 to US$1.6 billion in 2016. It will post a forecast-period CAGR of 7.6% to reach US$2.2 billion in 2021. Upscale hotels contributed the most to total revenues during the review period (2012-2016), however luxury hotels are set to outpace them over the forecast period.
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