Travel And Tourism Business Performance Results For Q1 2016

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Notwithstanding the rising inflation and slow economic growth, overall business performance levels in South Africa’s travel and tourism sector have remained steady in the first quarter of 2016.

This is highlighted in the latest results of the TBCSA Tourism Business Index (TBI). The report shows that businesses in the sector experienced almost normal business performance levels in Q1, recording an index score of 97.8, slightly below the score of 100, which would indicate normal performance levels. It is important to note that this result is very close to the anticipated index score of 94.6, which was forecasted in the last quarter.

Although there was a small decline in performance compared to Q4 2015, businesses in the sector performed closer to normal levels in this quarter, buoyed by strong performance in the accommodation sector.

Delving deeper into the two main components that make up the TBI, the report shows that Q1 performance levels came in higher than expected in the accommodation segment at 119.3, compared to the anticipated index score of 100.8. This is one of the strongest performances for this segment, only surpassed previously in Q1 2013. In contrast, the other tourism businesses segment, recorded lower than normal business performance levels, at 81.2, an index score that is below the forecasted score of 89.9.

The first quarter results of the RMB/BER Business Confidence Index remained unchanged from the previous quarter at a score of 36, which is well below normal levels (where a score of 50 indicates normal levels of confidence) and the SACCI Business Confidence Index (BCI) shows a drop in the quarterly average (from 83.6 to 80.4) in Q1 2016, more or less in line with the small decline seen in the TBI.

Looking at the key contributing factors on performance levels, the cost of inputs was highlighted by both the accommodation segment (56 percent) and other tourism businesses (63 percent) as the greatest negative contributing factor to business performance in this quarter. The accommodation segment, also cited the cost of labour (40 percent) and insufficient domestic leisure demand (32 percent) as other key factors contributing negatively to performance; meanwhile, other tourism businesses segment cited the impact of competitor market behaviour (58 percent) and the cost of finance (44 percent) as contributing factors.

From an inbound tourism perspective, strong overseas leisure demand and the weak exchange rate remain the most prominent positive contributing factors.

Compiled by: Melissa Jane Cook. Source: HospitalityNet. 



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Bewitched by the magic of France, Melissa Jane Cook is an intrepid explorer. A lover of traversing the globe, she eagerly absorbs different cultures and laps up the magnificent oceanic experiences. Wooed by words and writers alike, her penchant for facials, chocolate, owls and bugs, is surpassed only by her fascination with the stage aglow in lights or bookshelves that heave with stories, where characters invite her along on their marvellous journeys.