Tourism a model industry

MAY is developing a reputation as the month to spotlight tourism, with tourism events at the World Economic Forum meeting in Cape Town quickly followed by the Tourism Indaba, beginning this weekend in Durban. It is well known that SA’s tourism industry is one of the major success stories, but it is worth asking which new challenges the sector faces and how far its success can be extended.

Judging by the assessment of the Department of Tourism, the future possibilities are enormous. President Jacob Zuma reiterated at the forum that SA aimed to practically double the number of tourists in the next decade. That would entail increasing the number of visitors from 7-million in 2009 to 15-million by 2020. The idea is to simultaneously increase tourism’s contribution to the economy slightly disproportionately, from R189bn in 2009 to just under R500bn by 2020.

This seems a tall order, but SA’s targets are higher than they would be, in line with international expectations of a roughly 80% growth in tourism over the next decade.

Is this realistic? Possibly. To reach the target, tourism numbers have to increase by about 4% a year. That does not seem much, but it means an extra 500 000 people a year. However, in 2008 there was a dip in tourism along with the economic downturn. On the other hand, the latest figures for January suggest a 7% year-on-year increase, well above target.

Why has the tourism industry been so successful? Opinions will differ, and some of it simply has to do with luck and a great product.SA is a long-haul destination for most international travellers, but it’s also contra-seasonal for northern hemisphere dwellers.

The liaison between the tourism business and government and quasi- government bodies seems to have been unusually co-operative and, critically, with a good eye for detail. The administration has not been overbearing, and each participant seems to have had a clear idea of what their function should be.

Marketing has been aggressive, as it must be in this industry, and reasonably well divided between public and private efforts. It helps that the industry is characterised by small and competitive entities.

SA’s big challenge has been to maintain its current high level of European and African tourist inflows while at the same time providing opportunities for new tourists from growth areas in Asia and South America. Progress is being made. For example, the number of tourists from China and India increased by 21% and 62% in January this year compared to last year.

Yet, this also demonstrates the problem: the numbers are so small, big increases are possible without making a big dent on the bigger picture. There are still only about 6000 tourists a month from India, the second-most populous country.Still, the overall direction is right and SA does have the base resources to continue capturing more of the global market . In some ways, the industry is a model for how others should operate.

Source = businessday.co.za