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Quarterly business confidence in tourism jumps compared to one year ago

Quarterly business confidence in tourism jumps compared to one year ago

Reflecting the expected early-in-the-year lull in the tourism sector, the FNB/Fenata Tourism and Travel Index for the first quarter of this year shows a marked decline from the previous quarter but also that business has improved substantially since the first quarter of 2016.

Although quarter on quarter, December 2016 to March 2017, the index declined by a substantial -20%, when compared to the first quarter of last year, the business performance indicator rose from 3.3 to 4.6 index points, an improvement of just over 39%.

“Business performance dipped marginally since December [2016], with [only] 12% of the respondents stating that business was poor. However, when compared to a year ago, the business performance indicator increased from 3.3 to 4.6 stated the index compiler, FNB’s Market Research Manager, Daniel Kavishe.

“The improvement during the quarter was mainly a result of the increased number of tourists, evidenced in the international flight arrivals, as compared to the same quarter last year.” a fact corroborated by almost 50% of the respondents.

Half of all respondents are of the opinioin that the industry will grow faster in 2017 than in 2016.

“Overall, respondents felt that the second quarter of the year would show strong and robust growth. The sentiment index, which captures future expectations, was at an all-time high recording 3.6 on the back of a 17% q-o-q growth in business performance expectations. Revenue expectations have also lifted for the quarter to 4.0 from 2.7, mainly on the back of the increased number of tourists. The respondents expect a 5% increase in tourists during the second quarter compared to the second quarter of 2016” said Kavishe.

On the sector employment potential, he said “over 30% of the respondents stated that there will be an increase in the workforce during the second quarter of the year [2017] as the market stabilises. The concern among the respondents remains that of high turnover in the sector followed by the poor service delivery from staff.”

“Significantly fewer bed nights were sold to domestic tourists during the first quarter [of 2017] as disposable income comes under pressure and accommodation prices rose. With the Rand expected to depreciate over the remainder of the year, coupled with higher tourist arrival numbers, we anticipate a slightly better tourism season in 2017 compared to last year” concluded Kavishe.


 

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