Author: Patrick Lawlor
Travel and tourism remains a bright spot in South Africa’s economic outlook. The aviation sector has been one of the beneficiaries, particularly private charters servicing the booming safari and game lodge sector. We speak to a shuttle and charter flight business who is on track for their best year ever.
Last year, the term “revenge travel” came into vogue, referring to the release of the pent-up demand for travel that had built up during the Covid-19 lockdowns. That urge to travel has not abated this year, with tourism hotspots such as Italy looking to beat their records for overnight stays set in 2019, while France is set to see record spending by visitors this year.
Global flight bookings in the year to March were already up 25% year-on-year, 31% higher than in the 12 months to March 2019, according to data from the Mastercard Economics Institute.
This boom in tourism is happening even as rising fuel costs and other forms of inflation – along with higher interest rates – have eaten into household budgets. Travellers seem happy to absorb the higher costs to feed the travel bug.
South Africa has not been left behind in all of this and may even benefit further as the costs of travel rise in developed markets. With a weaker rand, tourists are finding South Africa a value-for-money destination, adding to our usual drawcards: excellent climate, beautiful scenery and extensive wildlife.
Travel and tourism remains one bright spot in South Africa’s economic outlook, even as traditional industries such as mining battle against weaker commodity prices and production challenges.
Tourism can also help trigger increased employment and fixed investment, either directly in hotels and hospitality, and airlines, or indirectly in industries such as retail and entertainment.
The official numbers bear out the view of tourism’s rebound this year. Stats SA numbers show that there was a 63.4% rise in total tourist numbers year-to-date to the end of August when compared to the similar period last year. Overseas visits were up by 59.4%, mostly from Europe and the UK and Germany in particular. Tourism from the rest of Africa was up 64.8%, mostly from SADC countries. The number of travellers from China increased by 246.6% year-to-date compared with the similar period last year, supported by the lifting of Covid-19 travel related restrictions.
According to Investec economist Lara Hodes, income derived from the domestic tourist accommodation industry increased by 29.1% in the 12 months to July, with receipts close to pre-pandemic levels.
She notes that the hotels category (up 30.3%) and the “other” accommodation grouping (including lodges, bed-and-breakfast establishments, self-catering establishments and ‘other’ establishments not elsewhere classified – up 34.2%) were the primary contributors to the second quarter’s notable increase.
“Reported occupancy levels are still below those recorded pre-pandemic; however the outlook remains favourable, with tourism arrival statistics up significantly,” she adds.
Safari and game lodge visits
These trends support some of the niche forms of tourism. A specific growth area is in the safari and game lodge sector, with many foreign tourists keen to enjoy the wealth of wildlife that South Africa has to offer.
We spoke to Federal Airlines, a shuttle and charter flight business specialising in flights to South Africa’s top private game lodges. Investec recently provided Federal Airlines with an aircraft-secured revolving credit facility to finance its acquisition of six new Cessna Grand Caravan 208B EX aircraft. The new aircraft have joined the Federal Airlines’ fleet helping it to expand and take advantage of the increasing number of tourists looking to visit South Africa’s game lodges.