Growth in tourist accommodation is slowing, but the sector remains…
South Africa’s June economic data was lackluster and the economy is now expected to have contracted by up to 1% in the second quarter (Q2) after posting surprisingly robust growth of 1.9 % at Q1.
On an annual basis, mining production fell by 8% in June, manufacturing production by 3.5% and retail trade sales by 2.5%.
South Africa sees glimmer of hope despite talk of global recession
Power outages, the aftermath of April’s KZN floods, slowing global growth, rising domestic interest rates and soaring inflation combine to deflate South Africa’s economic recovery. South.
Still, there are some bright spots on the horizon. Freed from onerous restrictions to contain the fading pandemic, tourists who can afford it continue to reduce their pent-up demand. Tourist accommodation data for the month of June remained buoyant, although the rate of growth is slowing. And occupancy rates remain below pre-Covid levels.
In the year ending in June, the total revenue of the tourist accommodation industry increased by 50.1% in June 2022 compared to the same month last year. This points to a robust, if slowing, rebound in the tourism sector as a whole. In May the annual increase was 92.6% and in February it was 145.6%.
Base effects are clearly at play here, but that shouldn’t detract from the promise of the numbers. Tourist accommodation and the wider sector play a vital role in the economy. Foreign tourists bring hard currency and, when they convert it, spend rands that would otherwise not be spent here. Tourists, foreign and domestic, support businesses large and small. The opportunities for “inclusive growth” – to use one of the current art terms on this front – are plentiful.
The sector is also labor intensive, providing desperately needed jobs amid a 34.5% unemployment rate. Much of the work is low-skilled and low-paid, but every job matters. And it’s not all menial jobs. Guiding in all its forms and other tourism services require skills and know-how and demand decent wages.
Stats SA will release its quarterly labor force survey for the second quarter on Tuesday, which will include the latest reading on the unemployment rate. Tourist accommodation alone cannot reduce this number. But the revenue growth in the sector surely means it is one of the few industries that is actually creating jobs right now. DM/BM