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South Africa Tourism Report Q2 2011

South Africa Tourism Report Q2 2011

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Additional Information

Price	$530.00
Publisher	Business Monitor International
Date of Report	Apr 8, 2011

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Quick Overview

Tourism Overview
Final data for 2010 show strong growth in foreign tourist arrivals, up by some 15% year-on-year (y-o-y). This was equal to our forecast and, as we expected, there was a slowdown in growth in the latter part of the year, after a particularly strong increase in arrivals (+20% y-o-y) in H110. For the year as a whole, arrivals from Africa rose favourably, increasing around 15% y-o-y, with visitors from Zimbabwe continuing to dominate the increase, rising over 23% y-o-y. Although a lower proportion than in the previous year, Zimbabwean visitors still accounted for more than 40% of the net increase in arrivals from Africa. Following negative growth in 2009, there was a turnaround in growth of arrivals from Europe in 2010, rising some 14% y-o-y, with significant growth in visitors from North America (+17% y-o-y), the Middle East (+14%) and Asia (+14%).
Hospitality
After the total number of foreign and domestic tourist room nights in all accommodation establishments decreased by more than 8% y-o-y in 2009, preliminary hospitality sector data for 2010 are disappointing.
Despite the number of tourist room nights increasing sharply in June 2010 – boosted by the FIFA World Cup – room nights fell by an annual 2.7% in the year as a whole. Moreover, in Q310 and Q410, the number of room nights sold showed a worsening trend, declining 1.7% and 5.9% y-o-y respectively.
Forecast Scenario
The solid pick-up in growth of foreign tourist arrivals and tourism receipts in 2010 was partly due to South Africa hosting the World Cup, but also the result of economic recovery in key source markets. We have revised our growth forecast for tourist arrivals in 2011 and now expect growth to slow but remain reasonable, largely due to stable economic growth in Sub-Saharan African and the eurozone. We also maintain our view that the South African rand will continue to make gains against the US dollar and the euro over the coming years, with end-year forecasts of ZAR7.8800/EUR and ZAR6.3000/US$ for 2012. BMI believes that the strength of the rand over the long term will act as a constraint to international tourism.
Sun International
In its financial results for the six months ending December 31 2010, South Africa’s Sun International reported a 9% y-o-y rise in revenue to nearly ZAR4.5bn. Gaming revenue was up by 8% y-o-y, while revenue from rooms increased by a solid 14% from the same period in 2009 (partly due to the World Cup). However, overall group occupancy was about 3% lower y-o-y, at slightly less than 67%, but the average room rate increased by 9% y-o-y to ZAR897. The decline in occupancy rates was primarily the result of weaker demand from international markets. Sun International anticipates that hospitality revenues will remain soft for the rest of the financial year, although gaming revenues have stabilised and are showing signs of improvement in certain locations.
South African Airways In February, it was reported that South African Airways (SAA) had received the first of six new Airbus A330-200 aircraft scheduled for delivery in 2011. In March, SAA introduced wide body aircraft on the Johannesburg/Nairobi route, effectively increasing seat capacity. In the same month, SAA and New York-based JetBlue Airways expanded their code-share agreement on SAA services from Johannesburg to New York’s John F. Kennedy International (JFK) and Washington, D.C. (Dulles) airports, where travellers can connect to 20 cities served by JetBlue Airways.

Table of Contents

Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 7
South Africa Tourism SWOT ................................................................................................................................................................................. 7
South Africa Political SWOT ................................................................................................................................................................................ 8
South Africa Economic SWOT .............................................................................................................................................................................. 8
South Africa Business Environment SWOT ........................................................................................................................................................... 9
Industry Forecast Scenario ........................................................................................................................... 10
Arrivals ............................................................................................................................................................................................................ 10
Table: Arrivals Data, 2007-2015 ........................................................................................................................................................................ 10
Accommodation ............................................................................................................................................................................................... 12
Table: Hotels Data, 2007-2015........................................................................................................................................................................... 12
Expenditure ...................................................................................................................................................................................................... 13
Table: Expenditure Data, 2007-2015 .................................................................................................................................................................. 13
Inbound Tourism .............................................................................................................................................................................................. 14
Table: Tourist Arrivals By Region, 2007-2015 ................................................................................................................................................... 14
Table: Tourist Arrivals By Country, 2007-2015 ................................................................................................................................................. 15
Outbound Tourism ........................................................................................................................................................................................... 16
Table: Outbound Tourism Data, 2007-2015 ....................................................................................................................................................... 16
The ‘World Cup Effect’ .................................................................................................................................................................................... 17
Table: Key Tourism Source Markets That Participated In The 2010 World Cup ................................................................................................. 18
Market Overview – Travel .............................................................................................................................. 20
Airports ............................................................................................................................................................................................................ 20
Commercial Airlines ........................................................................................................................................................................................ 21
Special Focus: Jet Fuel Costs .................................................................................................................................................................................. 23
Global Oil Products Price Outlook ............................................................................................................... 25
Table: Oil Product Price Assumptions, Q410-Q411 (US$/bbl)........................................................................................................................... 25
Table: Oil Product Price Data And Forecasts, 2008-2015 (US$/bbl) ................................................................................................................. 28
Market Overview – Hospitality ...................................................................................................................... 30
Accommodation Developments ................................................................................................................................................................................ 30
Casinos ............................................................................................................................................................................................................ 33
Table: Key Players In South Africa’s Hotel And Gaming Industry ...................................................................................................................... 33
Game Lodges ................................................................................................................................................................................................... 34
Regional Case Study: Accor .................................................................................................................................................................................... 35
Table: Accor Hotel Business In Selected Middle East And Africa Countries, December 2010 ............................................................................ 36
Business Environment Outlook .................................................................................................................... 37
Table: Middle East And Africa Travel And Tourism Business Environment Ratings ........................................................................................... 37
BMI’s Security Ratings .................................................................................................................................................................................... 38
Table: Middle East And Africa Defence And Security Ratings ............................................................................................................................ 38
Table: Middle East And Africa State Vulnerability To Terrorism Index .............................................................................................................. 39
South Africa’s Security Ratings .......................................................................................................................................................................... 39
City Terrorism Ratings .................................................................................................................................................................................... 40
Table: BMI’s Africa City Terrorism Index .......................................................................................................................................................... 41
Middle East And Africa Security Overview .............................................................................................................................................................. 43
Special Report: Crime ................................................................................................................................... 45
Global Assumptions, Q211........................................................................................................................... 47
Table: Global Assumptions, 2009-2015 .............................................................................................................................................................. 47
Table: Regional Real GDP Growth, 2010-2013 (% change y-o-y) ...................................................................................................................... 48
Table: Selected Exchange Rates, 2010-2013 (average) ...................................................................................................................................... 48
Developed States .............................................................................................................................................................................................. 49
Table: Developed States’ GDP Growth, 2010-2013 (% change y-o-y) ................................................................................................................ 49
Emerging Markets ............................................................................................................................................................................................ 50
Table: Emerging Markets’ GDP Growth, 2010-2013 (% change y-o-y) .............................................................................................................. 51
Consensus Forecasts ........................................................................................................................................................................................ 52
Table: Consensus Forecasts, 2011 And 2012 ..................................................................................................................................................... 52
Company Profiles .......................................................................................................................................... 53
South African Airways ................................................................................................................................................................................ 53
Southern Sun ............................................................................................................................................................................................... 55
Sun International ........................................................................................................................................................................................ 56
BMI Methodology .......................................................................................................................................... 58
How We Generate Our Industry Forecasts .............................................................................................................................................................. 58
Tourism Industry ......................................................................................................................................................................................... 58
Tourism Ratings – Methodology ......................................................................................................................................................................... 59
Table: Tourism Business Environment Indicators .............................................................................................................................................. 60
Table: Weighting Of Components ....................................................................................................................................................................... 61
City Terrorism Ratings .................................................................................................................................................................................... 61
Table: City Terrorism Rating Methodology ........................................................................................................................................................ 63
Sources ............................................................................................................................................................................................................ 63