The Stats SA’s December 2022 tourist accommodation report found that accommodation income increased by 46.7% compared to the fourth quarter of 2021, and hotels were the biggest contributors to this growth. Hotels contributed 63.3% to this figure, or R3.5 billion, while other forms of accommodation contributed half of this – 33.4% or R2.8 billion.
December 2022 was the first festive season without Covid-19 restrictions in place since the start of the pandemic. There was a 19.9% increase in the number of stay unit nights sold and an increase of 19.7% in the average income per stay unit night sold. Here, again, the biggest contributor was hotels at 62.8%, while other accommodation contributed 27.8%.
Stats SA reported hotel occupancy rates for this period at 41.1%. However, Rosemary Anderson, the national chairperson of FEDHASA (Federated Hospitality Association of South Africa), says their members reported significantly higher occupancy levels, of an average of 65%, with many hotels very close to pre-Covid levels and a number exceeding 2019 room occupancy rates.
Food & Beverage data
The latest food and beverage data included in the December report show that total income increased by 13.4% in the fourth quarter of 2022, compared to the fourth quarter of 2021. This translates into R18.5 billion, with the main contributors being restaurants, coffee shops and catering services. December 2022 saw an increase of 14.2% compared to the previous year, with the most significant annual growth rates being bar sales at 25.5% and food sales at 13.6%.
A lack of basic services will jeopardise this recovery
While these are promising growth indicators, tourism has yet to recover to pre-Covid-19 levels due to various challenges. Chief among them is the electricity crisis.
One FEDHASA member hotel in Johannesburg spent R1 million on diesel in December alone.
Rosemary explains, “Food and beverage is not showing growth at the level we had hoped. In addition to loadshedding, other impediments include the higher cost of living and food inflation. And while we welcome the news that hotels are driving recovery and occupancy is up, we believe this could hinge on their ability to invest in an alternative energy supply, such as generators and solar installations. Tourist confidence would also lean towards hotels for this reason.”
Unfortunately, the hotel revenue being gained is also being depleted by the running costs of keeping the lights on. Rosemary shares that one FEDHASA member hotel in Johannesburg spent R1 million on diesel in December alone. Smaller accommodation providers do not have access to the finance needed to invest in such solutions. “They cannot survive loadshedding long-term. The situation is critical, and we urge Government to expedite energy security interventions now that a state of disaster is in place,” she adds.
Reliable water supply is also becoming crucial, with another FEDHASA member on the South Coast spending R1.5 million in December to transport bulk water to the property following the collapse of water provision from the local municipality.
Reliable water supply is also becoming crucial, with another FEDHASA member on the South Coast spending R1.5 million in December to transport bulk water to the property following the collapse of water provision from the local municipality. Clearly this is not financially sustainable.
Creating a more conducive environment
The World Travel and Tourism Council has predicted that tourism will drive South Africa’s economic recovery over the next 10 years and grow at an average rate of 7.6%. The industry is also expected to create 800 000 jobs in this same period. However, Rosemary highlights that this growth is threatened by the lack of basic services, while the safety of tourists is another compounding concern.
“If Government could create a conducive environment for tourism by providing reliable bulk services, removing industry red tape, creating an efficient e-visa system, and reducing crime, tourism could be the answer to unemployment and create more than 800 000 jobs – it could create millions of jobs. While we remain hopeful for 2023, we need to stay focused on these barriers to travel, hospitality and tourism, and continue motivating for change,” concludes Rosemary.
Cover image by Clay LeConey on Unsplash