South Africa: Keeping it local

With a slowdown in Europe and North America, which have provided the mainstay of South Africa’s inbound holidaymakers, the tourism sector is now looking to emerging African markets for new sources of leisure and business travellers.

“The reality is that for Europe and America, we are a long-haul destination and the global meltdown means that these travellers have less money to spend on holidays and will therefore vacation closer to home,” Thulani Nzima, the CEO of South African Tourism (SA Tourism), which serves as the country’s tourism promotion arm, recently told OBG. “In the past, we did not place a lot of focus on the African market, and as the continent grows and Africans have more disposable income to spend, it makes sense to target the continent, as we are relatively easy and cheap to get to.”

Indeed, figures reveal that tourist arrivals from Africa grew 10.3% annually from 2003 to 2010, during which time the continent’s contribution to total arrivals grew from 68% to 77%. These figures may, however, be distorted by the fact that many cross-border arrivals entered for migrant work, rather than holiday or business purposes. Irrespective of intention, the average spend per African visitor has increased across all African markets, according to SA Tourism.

In addition to the promise of increased visitor traffic, an additional benefit to be gained from this emerging segment is visitor diversification, as African tourists’ preferences and motivations for visiting the country differ from Europeans, which bodes well for offsetting seasonality and spreading distribution.

In particular, the tourism industry is working to attract visitors from burgeoning resource-rich African states such as Nigeria, Angola and the Democratic Republic of the Congo. This is especially hopeful news for up-market hotels and operators as “many hotels, especially those newly built in the five- star bracket in anticipation of the FIFA World Cup, are not making money today,” said Samuel Ogbu, the CEO of Liberty Group Properties, adding “the level of aggressive price competition is not sustainable and I am surprised that it has continued so long without more casualties.”

While on the surface it appears that proximity should inevitably translate into greater connectivity and ease of arrival for African visitors, cumbersome visa requirements, as well as a lack of direct flight options, remain a challenge. According to Nzima, “You have to look at the entire value chain and what impacts on South Africa being an affordable and accessible destination. We try to advise the government and airlines on pricing strategies and joint multilaterals with other countries to institute initiatives such as open-sky flight agreements and joint visas that will unblock traffic flows”.

Marthinus Van Schalkwyk, South Africa’s minister of tourism, echoed the need for streamlining the entry process, telling OBG, “A major barrier includes the possible difficulty of obtaining visas quickly, especially for incentive groups from emerging markets, such as China, India and within the African continent".

South Africa has also been working aggressively to position itself as a meetings, incentives, conferences and exhibitions (MICE) destination in recent years, with encouraging results coming on the back of the country’s hosting of large-scale gatherings including COP 17, a UN climate change conference. In the second half of 2011 the government established the National Conventions and Events Bureau (NCEB), which, according to Van Schalkwyk, “was set up as an attempt towards a coherent approach to bidding for international events and to capitalise on the successful hosting of the 2010 FIFA World Cup, and to use that as a springboard to secure more events of a similar scale”. According to the NCEB, the country has so far secured 300 conferences leading up to 2015, which could collectively inject around R1.3bn ($168.39m) into the economy.

In 2013, South Africa is set to play host to the African Cup of Nations football tournament, an event it was awarded in 2011 after Libya, who had originally won the bid, fell into civil war. According to Nzima, “The fact that we were immediately considered to fill in last minute shows that we have the infrastructure and know-how in place to prepare for large-scale events in very little turnaround time”. The country is hoping this international confidence in its tourism sector extends to potential visitors closer to home.