Propelling South Africa’s economy forward, one tourist at a time

01 NOVEMBER, JOHANNESBURG: South Africa's tourism industry has not just rebounded from the pandemic, it has found itself in a position to pursue aggressive growth. In the first quarter of 2023, the country welcomed over 2 million visitors. Furthermore, over the next decade, this sector is projected to generate an impressive 800,000 jobs and inject a substantial R287 billion into the national economy. As a nation and continent in the midst of a demographic boom, this could signal the beginning of a prosperous period if managed correctly. 

What is even more encouraging is the foreign direct spending for this period, which reached an impressive R25.3 billion, marking a remarkable 143% surge from the same timeframe in 2022. With such positive indicators, the local tourism industry is well-positioned for continued growth. If they play their cards right, the industry's key stakeholders could be the driving force behind amplifying this success and contributing to the full realisation of South Africa's tourism potential.

Spotting diamonds in the rough

Strong tourism sectors are founded on businesses that see opportunity where others do not. Since 2010, Mbombela in Mpumalanga has seen virtually no new hotel development and the industry in the area was stagnating. That worsened when the pandemic hit and gutted the local and international demand. By seeing the pandemic as an opportunity and noticing how the area interacted with visitors from neighbouring Mozambique, The Capital Hotels, Apartments and Resorts was able to turn adversity into growth. 

“Chaos creates opportunities and our Mbombela property is an example of how well things can work out if you’re not scared to make bold decisions based on trusted data, your team and your Unique Selling Points,” says Marc Wachsberger, CEO of The Capital Hotels, Apartments and Resorts adding that “We developed that location during the pandemic and now it is one of the best performing properties in the group. Being able to capitalise on the tourist traffic from Maputo and a local audience starved for a modern hotel is a big reason for that.”

The New Silk Road

Underpinning the growth of the tourism and hospitality industry in the country is the fact that Africa is open for business in a big way. Zimbabwe’s massive lithium deposits, Kenya’s mushrooming technology sector, a new oil refinery in Nigeria and demographics skewed towards the young and entrepreneurial, bodes very well for the continent. As home to Africa’s busiest airport and with its relatively well developed infrastructure, South Africa is the perfect intermediary for those looking to do business on the continent. As the number of Indian, Chinese and other international business visitors continues to surge, South African hotels have emerged as meeting places providing sophisticated, reliable venues where people can experience service at an international level without being concerned about power supply issues.

Wachsberger says, “We’re not ones to rest on our laurels. We are currently doing about 30% better than most of our nearest competitors and would like to keep it that way. So, we are carefully looking at expansion plans into South African and thereafter the rest of Africa. There will be some difficulties, but we believe key parts of the continent have the same fundamentals as South Africa so we’re confident we can make it work.” 

As one of the few sectors of the economy experiencing strong growth, tourism has the potential to provide some much-needed relief to people across the country. All it needs to make good on these gains is a regulatory framework that encourages innovation and businesses that are bold enough to see opportunities where others do not.