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Concern as South Africa’s accommodation business continues to decline

Travel and tourism authorities in South Africa this week have expressed concern about the continuous decline in performance of accommodation businesses despite the slightly recovery of the sector from years of misery and below performance.

The industry segment comprises three-star and five-star luxury hotels, lodges, budget accommodation, among others.

The accommodation sector performed below normal levels in the last quarter of 2016, scoring a tourism business index (TBI) of 89.5, against the expected score 109.4, the Tourism Business Council of South Africa (TBCSA) said in its report published on Wednesday.

There was a decline in the accommodation index, TBCSA CEO Mmatšatši Ramawela admitted. “Yes, the world is a completely different place today compared to 2013, but this trend is still worrisome to say the least,” she said.

Gillian Saunders, deputy CEO and head of advisory services at Grant Thornton, believes a decrease in domestic leisure demand is likely to be the main culprit to the decline in the accommodation index.

“After analysing each individual accommodation type, we noted that self-catering establishments which are important suppliers to the domestic leisure market experienced poor performance during the surveyed months and performance was not as high as expected,” Saunders said.

“Almost a quarter of accommodation respondents and more than a third of other business respondents cited insufficient domestic leisure demand as a negative constraint on performance.

“As 2016 was a tough year economically in South Africa, we believe a decline in domestic travel over the holiday months to be the cause for the decrease in the accommodation index”.

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