According to a recent member survey by the Federated Hospitality Association of Southern Africa (FEDHASA), South Africa’s peak December 2023 tourism season showed signs of recovery, but conditions varied greatly by region. Data indicates that while the Western Cape saw strong demand in line with expectations, KwaZulu-Natal showed unexpected resilience despite facing challenges that threatened its key beach tourism assets.
“The Western Cape once again proved itself as the country’s premier domestic and international tourism destination this past December,” said Rosemary Anderson, FEDHASA National Chairperson. “Occupancy rates, room rates and visitor spending met or exceeded pre-pandemic levels in many areas.”
However, the picture was more mixed in KwaZulu-Natal. “Given the recent pollution issues that impacted popular swimming beaches, we feared the worst heading into the holiday season,” said Anderson. “Yet we were pleasantly surprised to see many establishments report better-than-expected occupancy and revenues over December.”
Anderson credited KwaZulu-Natal’s tourism industry for effectively managing the negative publicity and offering alternative inland attractions and activities not affected by the coastal water quality problems.
While conditions remain challenging in light of global economic uncertainty, these early FEDHASA survey results provide optimism that South African tourism has turned a corner coming out of the pandemic.
“The survey results give us valuable insights into the state of the tourism industry and remind us of the collaborative efforts needed to ensure its continued growth and success. They highlight both its importance in delivering excellent service and its vulnerability to external factors,” said Anderson.
“The industry is doing all the hard work to provide quality service and support to guests and visitors. However, we depend on many factors outside our control to deliver a world-class tourism experience – like power, water, infrastructure, and safety,” continued Anderson. “To remain competitive globally and grow tourism sustainably, we must have strategic collaboration between the private sector and government. With teamwork, we can achieve our shared goals of an industry that drives inclusive economic growth and opportunity.”
KwaZulu-Natal battles challenges, emerges resilient
In KwaZulu-Natal, particularly in locations like Durban and Umhlanga, many hospitality providers reported decreased or flat turnover compared to last year and pre-pandemic levels. Contributing factors ranged from beach pollution to flooding.
However, FEDHASA highlighted encouraging indicators as well, including longer average guest stays, growth in family travel, and some businesses adapting pricing strategies to successfully drive bookings.
FEDHASA also noted promising signs of recovery in inland areas like the Drakensberg and Midlands, where turnover increased for some operators compared to 2022. This aligns with FEDHASA’s perspective on the growth opportunities associated with KZN’s diversity in experiences beyond the coast.
- Hotels and restaurants in Umhlanga Rocks, Durban, and Durban Central reported decreased or stable turnover in December 2024 compared to the same period in 2022.
- Respondents indicated a decrease in turnover compared to pre-Covid levels, with only a minority stating it remained the same.
- In December 2024 for Drakensburg and Midlands either increased or remained the same compared to 2022, suggesting a potential tourism uptick from coastal visitors.
- Respondents shared shifts in turnover compared to pre-Covid levels in 2019, with 33% noting increased profits and 38% indicating decreased profits.
- Positive factors included minimal loadshedding and water outages, longer guest stays, and an increase in family groups.
Western Cape’s tourism thrives: Cape Town leads the way
The Western Cape yielded more consistently positive metrics, with 73% of surveyed accommodations seeing increased turnover versus the same period in 2022. Cape Town and destinations like Knysna and Plettenberg Bay observed high demand, while most other businesses maintained stable levels. The restaurant sector also performed well, with over half of respondents reporting increased revenues compared to last year. Most significantly, 63% achieved turnover equal to or exceeding pre-pandemic seasons.
FEDHASA attributes these optimistic indicators in the Western Cape to rising domestic and international arrival numbers, along with notable improvements in staff retention and service delivery enhancing the guest experience. Cape Town’s Atlantic Seaboard proved particularly attractive to new visitors during the peak season, which FEDHASA sees as a promising outcome of focussed destination marketing efforts.
Cape Town International Airport’s status as a “world class airport with an ever-growing route network” paid dividends for the destination in December 2023. WESGRO reported that the airport saw over 317,000 two-way international passengers travel through its international terminal that month.
“This impressive passenger number highlights how Cape Town International Airport’s investments into expanding its global connectivity and world-class facilities continue to pay off in terms of international tourist arrivals,” said Anderson.
- 73% of accommodations in Cape Town and popular holiday spots reported increased turnover in December 2024 compared to 2022.
- 10% saw an increase in turnover compared to pre-Covid levels in 2019.
- Restaurants had a favourable performance, with 53% reporting increased turnover and 26% reporting a decrease.
- Most respondents indicated turnover stability or growth compared to pre-Covid levels in 2019.
- Positive aspects included a mix of domestic and international guests, an increase in foreign visitors, and improved staff retention and service quality.
Leading hotel groups paint a broader picture
The Cape Town and Garden Route regions performed very well this holiday season, according to leading hotel groups that participated in the survey. Occupancy rates reached 75% across regions – a two percentage point increase over last year. Cape Town saw substantial gains especially in terms of average daily room rates, with a 16% year-over-year increase.
While occupancy rates remained flat in Cape Town, the higher room rates contributed to the successful season. The Garden Route was also popular compared to traditional demand in KwaZulu-Natal, likely due to uncertainty surrounding potential beach closures in that province.
However, inland destinations saw more modest gains, with occupancy rates dipping two percentage points compared to last year. KwaZulu-Natal was also negatively impacted by the uncertainty over beach access. Overall, though, South Africa saw gains in both occupancy and rates over last year’s holiday season.
“Continued uncertainty over discretionary income and spending power remains a challenge, but with another year of recovery from COVID impacts, the hotel industry is cautiously optimistic about future holiday seasons if current trends can be maintained. Targeted marketing highlighting South Africa’s natural assets could further boost future domestic and international travel interest,” said Anderson.
Green shoots require government and hospitality engagement to grow
“While challenges remain, the green shoots of recovery we’re starting to see in South Africa’s vital tourism industry are genuinely heartening,” said Anderson. “With strong leadership, strategic partnerships between government and industry, and collective effort, we believe this sector can thrive as a leading employer and contributor to the economy. But this requires ongoing engagement and nurturing to foster the right conditions for sustainable growth,” said Anderson.
Anderson continued, “As the voice of the hospitality sector, FEDHASA will continue working closely with stakeholders to help tourism flourish. By sustainably leveraging our country’s natural beauty, the warmth of our people, and the rich diversity of our regions, we can revitalise an industry that can drive inclusive growth and opportunity for all South Africans.”