Tourism income in South Africa rises, but challenges persist

In a promising sign for the South African hospitality sector, the tourism and hospitality industry in South Africa has hailed the 12.1% year-on-year increase in income derived from tourist accommodation for December 2024.

This growth, albeit slightly less than the previously revised 12.9%, coincides with a broader year-on-year increase of 11.8% for the fourth quarter of 2024 compared to the same period in 2023.

Recent data from Statistics South Africa (Stats SA) showed that the hotels category was the largest contributor to the overall increase, adding 8.1 percentage points to the 12.1% rise with its own robust growth of 13.6%.

Furthermore, the “other” accommodation segment – which includes lodges, bed-and-breakfast establishments, and self-catering options – contributed an additional 3.5 percentage points.

According to the Minister of Tourism, the ongoing growth in the sector serves as a vital engine for economic recovery.

International tourism data from Stats SA underscores this narrative, revealing that tourist arrivals to South Africa rose by 5.1% year-on-year in 2024, complemented by a 3.7% increase in overseas travellers.

Notably, visitors from Central and South America surged by an impressive 60.4%, while arrivals from other African countries (excluding those from the Southern African Development Community) increased by 25.1% year-on-year.

Recent figures for January 2025 have further demonstrated a continuing upward trend, with international arrivals increasing by 4.3% and overseas tourists seeing a more significant rise of 7.8%.

This positive outlook has been bolstered by essential visa regime enhancements, including the introduction of the digital Trusted Tour Operator Scheme (TTOS) visa initiative, which aims to streamline visa processes for travellers from India and China—two critical markets.

The Federated Hospitality Association of South Africa (Fedhasa) has welcomed the findings, which echo a steady rebound in the tourism industry following the significant disruptions caus ed by the COVID-19 pandemic.

Despite these positive indicators, Rosemary Anderson, chairperson of Fedhasa, urged for a nuanced understanding of the recovery.

While she acknowledged the significant 12.1% increase in accommodation income, she cautioned that the recovery has not been uniform across regions or establishment types.

“Growth has not been evenly distributed,” she noted, highlighting that while hotels and alternative accommodations saw a healthy rise, smaller operators in less-frequented provinces like Limpopo and parts of the Eastern Cape continue to struggle due to visitor distribution unevenness and infrastructural challenges.

Some areas, such as Cape Town, reported record-breaking numbers during the festive season, yet others, like Durban, experienced surprisingly low occupancy rates—hovering below 50%, far short of the pre-pandemic norm of 75% or higher. Restaurants in Durban echoed this trend, reporting weaker-than-expected trading conditions, signalling a more complicated picture for the tourism landscape.

Moreover, despite the year-on-year growth in international arrivals, South Africa still lags behind its historical performance levels of prior years.

In December 2017, the country recorded 2 725 855 international arrivals, and even in December 2019, that number was slightly less at 2 612 158. In stark contrast, December 2024 saw just 2 136 641 arrivals, illustrating that there is still significant ground to cover for the tourism sector to fully recover.

“Fedhasa remains dedicated to collaborating with government and private-sector partners to ensure sustainable long-term growth in tourism beyond just seasonal peaks,” Anderson said.

As South Africa continues its journey towards recovery, the aim will be not just to restore lost numbers, but to enrich the visitor experience and fortify the tourism infrastructure in order to secure the future of this crucial economic sector.

BUSINESS REPORT