Tourism Business Council of South Africa figures exceeded expected performance at the end of 2012, reaching 104.6, against a score of 100 which is considered normal.
This is up on the previous result of 101.1 and is a vast improvement on the index of 87.3 scored at the end of the previous year.
Speaking at the release of the report, board chairman of the Tourism Business Council of South Africa, Mavuso Msimang, said the latest index results provided relief for a sector that has been through two, very tough years.
“This is the second consecutive quarter that TBI has recorded performance levels above the norm and is a clear indication of the extent to which business is recovering from the recessionary impacts and excess of supply it suffered post the 2010 Soccer World Cup.”
The sector’s resilience and ongoing long-term potential shows through in the business and investor confidence for capacity and employment increases.
This result should also be viewed in the context of overall reduced business confidence reported in the fourth quarter reports from both SACCI Business Confidence Index and the RMB/BER Business Confidence Index which dipped slightly in quarter four of 2012.
However, in spite of the return to regular trading levels and the positive outlook, a number of factors remain a concern.
“Global economic uncertainty and ongoing recession risk, coupled with the negative profiling of South Africa internationally through labour and community unrest weighs heavily as a constraint for the sector.
Input cost increases from rates, electricity and fuel costs were also cited as negative factors affecting business performance,” explained Gillian Saunders, Grant Thornton’s head of advisory services.
Wiza Nyondo FNB head of tourism said: “The results show that the market has begun to recognise South Africa as a sought after destination. Although we’ve seen some instability, we still believe in South Africa’s diverse offering of services and products where industry professionals can partner to help transform our country.”
The majority of the accommodation sector respondents expect domestic business markets to offer the best potential growth for 2013, followed by foreign leisure and then domestic leisure.
Other tourism businesses expect growth to come from the foreign leisure markets, followed by domestic markets. Taken overall it would appear that the industry feels that it’s back to ‘business as usual’, or even slightly better than usual.
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