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South Africa’s tourism steady in Q1 2016

Tourism in South Africa remained steady in the first quarter (Q1) of this year despite rising inflation, slow economic growth and President Jacob Zuma’s corruption scandal.

Businesses in this sector experienced almost normal performance levels during the abovementioned period, recording an index score of 97.8, slightly below the score of 100, according to the TBCSA Tourism Business Index (TBI) published this week by the Tourism Business Council of South Africa (TBCSA).

Tourism, which contributes about 8% to South Africa’s Gross Domestic Product (GDP), seems to be bouncing back slowly but surely after a series of poor performances last year, which frustrated authorities and pushed a number of small businesses on the brink of bankruptcy.

Pretoria-based TBCSA, which said the 97.8 mark would indicate normal performance levels, noted that this result was very close to the anticipated index score of 94.6, which was forecasted in the last quarter.

This is one of the strongest performances for this segment, only surpassed previously in Q1 2013.

Commenting on the report, TBCSA CEO Mmatšatši Ramawela said it was clear from the results that businesses, particularly in other tourism sectors, were facing pressures in the operating environment.

Nevertheless, Ramawela emphasised that overall travel and tourism still faired far better than other economic sectors in the first quarter of the year.

Furthermore, examining the key contributing factors on performance levels, the cost of inputs was highlighted by both the accommodation segment (56%) and other tourism businesses (63%) as the greatest negative contributing factor to business performance in this quarter, the report said.

Gillian Saunders, head of advisory services at Grant Thornton said the rising cost of electricity was one of the factors pushing up the overall cost of inputs.

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