Pricing will be key in driving tourism recovery

Affordability and value-for-money offerings need to be a priority for the entire travel and tourism value chain if the industry is to recover, says Cape Town Tourism, the city’s marketing body.

The tourism sector is among those hit hardest after governments across the globe imposed stringent movement regulations to curb the spread of the coronavirus.

In South Africa, the sector is a key foreign currency earner and jobs driver. According to the latest available figures from Stats SA, tourism added about R118.4bn to SA’s economy in 2018, while contributing R18bn to Cape Town’s coffers. The sector is responsible for almost 740,000 jobs nationally and just more than 113,000 in Cape Town, South Africa’s main tourism hub.  However, a report in May by Cape Town Tourism indicated that more than 90,000 jobs in the city’s tourism sector could be wiped out over six months as the effects of the pandemic continue to be felt.

Cape Town Tourism, which markets the city’s tourism establishments, recently conducted a survey across the country to assess the lockdown’s effect on consumers. The survey shows that even when national and international travel opens up, it will take a while for the sector to recover as consumers have little or no disposable income to use on leisure travel due the financial knock-on effect of the pandemic.   Of the 5,485 responses received, 24% of respondents said that they had disposable income and only 5% would consider spending that income on leisure travel.

The overall sentiment of South Africans participating in the survey was that the strict lockdown was necessary in limiting the spread of Covid-19. Altogether 55% felt that the extended lockdown was needed, and many indicated that it allowed for a number of positive life changes such as more time with family, spending less and fewer perceived road accidents and crime. However, even with this positive sentiment, there have been lockdown challenges. Many households were dealt a massive blow as people across South Africa lost their incomes or were paid less.

Cape Town Tourism chair Brett Hendricks said that for the travel industry the most important part of this survey was how lockdown has affected everyone’s disposable income and the psyche of citizens.

“Even before this pandemic and the lockdown, South Africans were struggling in an economy that had recently been downgraded to junk status,” Hendricks said.

“With the closing of many businesses over the past few months and the rate at which people are losing their jobs, purse strings are being pulled even tighter. This is concerning for us in the travel industry.”

Travel has always been perceived as a luxury, said Hendricks, and if consumers are battling financially it means that travel might not be as high up on everyone’s list as before.

“In essence, we need to start thinking of innovative ways to still attract travellers to Cape Town, and affordability and value-for-money offerings needs to be a top priority for the entire travel and tourism value chain.”

Enver Duminy, CEO of Cape Town Tourism, said analysing whether consumers have disposal income and whether they would be spending this on travel when regulations allow, is critical to draw up tourism recovery programmes.

James Vos, the city’s mayoral committee member responsible for economic opportunities, said: “Looking at the results of this report ... we really have our work cut out for us if we want our industry to bounce back strongly.”

“Our main focus is how best to move from crisis into recovery by adjusting our plans to be ready for a reimagined tourism landscape. ... Only through instilling confidence in potential visitors will we be able to woo them back to the Mother City.”