Defend Truth


Unpacking those tourism numbers

Scottish-South African investment analyst Chris Gilmour has had a varied career in the financial world. After leaving Scottish & Newcastle Breweries in 1982, he came to SA, where he worked as an investment analyst for the dear departed Max Pollak & Freemantle, at the time one of the largest and most prestigious stockbroking firms on the JSE. During the next sixteen years he worked for many other stockbroking firms, latterly with Merrill Lynch. He has also worked on the buy side, as an institutional investment manager in Cape Town. Prior to joining Absa Investments in August 2007, he worked as an honest journalist with Financial Mail for over four years. He holds a B.Sc. (Hons) in Chemistry and a Postgraduate Diploma in Financial Studies, both from Heriot-Watt University in Edinburgh, Scotland. There is no truth to the rumour that he is a rabid Scottish Nationalist, just waiting for the call to return to Scotia in the wake of a majority vote for Scottish Independence in any forthcoming referendum.

While government’s World Cup tourist numbers are probably understated, South Africa’s overall tourism figures are nowhere near as high as official statistics suggest.

Home affairs minister Nkosazana Dlamini-Zuma’s recent assertion that only 56,000 extra football visitors arrived in South Africa appears to be way off the mark on the downside. Anecdotal evidence from Fifa World Cup match attendees suggest that figure must be a lot higher – and it probably is. Dlamini-Zuma did qualify her statement by saying that these figures only relate to the first three weeks of June and that the country can confidently expect many more football tourists before the World Cup finishes on 11 July.

This is definitely the case. And while the final tally of extra visitors is likely to be nowhere near the figure of 450,000 that was touted before the event started, it is still a very welcome boost to tourist numbers.

She said that, while 682,000 foreigners had entered South Africa until 21 June — a 23% increase on the same period last year — only a small percentage held Fifa match tickets or a World Cup visa.

What Dlamini-Zuma has done is draw attention to the fact that South Africa’s overall tourist numbers may, in fact, be overstated. In 2009, the country attracted a tad more than 10 million foreign tourists, almost twice the 5.7 million that Australia attracted last year and much more than Brazil’s 6.5 million.

At first sight this looks very impressive, even more so when one looks at the explosive growth that has occurred in tourist numbers in the past 16 years. But there is a fatal flaw in the data; the bulk (76%) of South Africa’s foreign tourists are arrivals from Africa by land. In other words, tourists from surrounding – mainly SADC countries – who arrive here by car, truck, train, van, bicycle or on foot.

There’s nothing wrong with that. After all, according to the World Tourism Organisation’s definition of a tourist, these people are, well, tourists. But they are not what are traditionally viewed as tourists. They mostly come to South Africa to buy goods they can’t get at home. Nothing wrong with that either—after all, this all helps to keep the economy rolling along.

But we should not confuse genuine tourists – people who arrive by air, stay in hotels and game lodges and use facilities such as restaurants and car hire – with people who are forced by economic necessity to come to this country in search of basic foodstuffs and other essentials. And while on the subject, it is worth mentioning that African arrivals by air are probably the country’s best tourists in terms of the amounts they spend. Traditionally, African air arrivals come to Johannesburg in mid- to late-December (when South Africans are holidaying at the coast and elsewhere) and take advantage of greatly discounted hotel rates in the city. Hoteliers are only too happy to accommodate these travellers, as they often spend lavishly in restaurants and bars, having Saved considerable amounts of money on hotel accommodation.

But they also spend a lot in upmarket shopping malls, often buying items they could only find in Europe, the Middle East or the US at far higher prices. Basically, they are relatively price insensitive (apart from their hotel accommodation) and are welcomed with open arms. Unfortunately, they account for less than 5% of foreign tourists.

But back to the hoi polloi. The sustainability of these travellers is questionable, given that the rest of Africa is growing at a far faster rate than South Africa as such. As more South African supermarket chains delve further into the continent, the need for Africans to travel to South Africa for the basic supplies diminishes. And it seems possible that one or more global retailers, such as WalMart, Carrefour or Tesco may even be persuaded to come to Africa. If that happens, the African countries in which they locate will be spoilt for choice compared with what they currently have.

One only has to look at what happened to the South African supermarkets near Beit Bridge that use to service the thousands of hapless Zimbabweans arriving there in search of food. Since the “dollarization” of Zimbabwe, that situation has all but evaporated.

So to base one’s future tourism hopes on African land arrivals would be risky. South Africa’s real foreign tourist figure is probably nearer 3 million, well below that of either Australia or Brazil. Remember, too, that Australia has no land borders and that all of its visitors are genuine tourists. Australia’s tourism receipts for 2009 were $25 billion, placing it eighth in the global ranking of tourism receipts. And that figure is more than twice what South Africa managed to rake in from foreign tourism last year, even though its foreign tourist arrivals were almost double those of Australia’s.

And while Brazil does have extensive land borders, its tourist numbers in the main enter by air. This is not surprising considering that the country’s two main cities, Sao Paolo and Rio de Janeiro, are on the Atlantic coast, far from any land crossings.

It must be hoped that South Africa’s successful hosting of the World Cup will propel it on to the stage of global tourism. So far, we have proved the doomsayers wrong—there don’t appear to have been any major incidents of crime, the special courts are dealing efficiently with offenders and the tournament itself is going like clockwork. Provided this momentum can be maintained after the World Cup, there is every reason to be optimistic that South Africa can significantly increase its overseas visitor tally and finally claim its rightful place as one of the most desirable tourist destinations in the world.


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