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South Africa
Travel - Leisure | Economy - Development

SA tourism (still) booming

afrol News, 22 May - New statistics on South Africa's tourism sector released today reveal that revenues from accommodation so far this year has increased by over 30 percent. The South African tourism industry so far has believed this boom would last until the 2010 World Cup, but the current wave of xenophobic violence could bode for a sudden setback.

According to data released from the government agency Statistics South Africa today, tourist accommodation has become a more profitable business this year. Both revenues and occupancy rates have risen sharply in the first quarter of 2008, when compared with the first quarter of 2007.

Income from accommodation in the first quarter of 2008 increased by 30.5 percent - corresponding to Rand 790.7 million (euro 66 million) - compared to last year. "This increase was partly the result of the switch of Easter holidays and the bulk of school holidays from April in 2007 to March in 2008," Statistics South Africa notes. Furthermore, income from accommodation in March 2008 had increased by 35.9 percent compared to March 2007.

Also the number of tourists had increased significantly. The number of stay unit nights sold during the first quarter of 2008 increased by 17.0 percent - from 4.6 million to 5.4 million - compared to the first quarter of 2007.

The hotel occupancy rate during the first quarter of 2008 increased by 15.3 percent - thus reaching a total of 56.0 percent - compared to the first quarter of 2007. Furthermore, the occupancy rate for March 2008 increased by 22.8 percent - up to 61.5 percent - compared to March 2007.

While the number of guests was booming, the number of new beds however has changed very little, providing a nice profit for established hotels. The number of stay units available between the first quarter of 2008 and the first quarter of 2007 increased only by 0.4 percent, according to the agency.

This significant growth comes well before the South Africa 2010 soccer world cup, for which the regional tourism industry is gearing up. Most new tourism infrastructure is planned to be inaugurated during 2009 and 2010. According to national planning, there should be no major capacity problems during the world cup, but with double-digit increases in tourist arrivals in the years before the soccer event, capacity could still become tight.

Currently, however, the industry has other problems. Authorities and industry players fear that the current wave of violence against immigrants - which strongly has damaged South Africa's image abroad - may cause tourists and investors to withdraw. Tourism, being a sensitive industry, could see immediate effects.

Indeed, the first cancellations have been registered. European and North American tourists - many of which have been travel advisories from their governments - have already started avoiding the popular and pedagogic township tours; leading to further poverty in these areas. African tourists and business travellers, which make up over half of arrivals, are starting to cancel trips on a larger scale.

These developments have caused panic in the South African tourism industry, which has been the most vocal in demanding government action. So far, provincial government has done little to comfort the industry, except delivering speeches aiming at calming down tensions and fears.

Paul Mashatile, "Minister" of Finance and Economic Affairs in the province of Gauteng - the hardest hit by the violence, encompassing Johannesburg, Soweto and Pretoria - yesterday tried to calm down visitors and investors. "Given its role as the economic hub of the African Continent and the Southern Africa region in particular, Gauteng offers massive benefits for foreign investors," emphasised. "We further urge those who had planned or intend to visit Gauteng not to cancel their plans as Gauteng still remains a safe place to visit," Mr Mashatile added.

While the industry still is in panic, observers however hold that the negative effects of the violence will not last for long, given that authorities find a quick solution. Tourist destinations hit by shocks such as terrorist attacks or natural disasters usually recover fully within less than a year, if authorities manage to address the shock well.

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