Jonathon was interviewed last night and asked whether Virgin’s decision to withdraw its South Africa flights would impact tourism. The article was published early this morning. Read more…
Earlier in September, the travel industry was shocked to learn that V Australia would axe its Johannesburg route in February 2011. As travel specialists, the arrival of Virgin onto the scene just months earlier heralded a new era seeing competition rise and flight costs fall (Australia to South Africa). Combine that with a strengthening Aussie dollar, things were looking up!
So does this recent announcement have a huge impact on Aussies wanting to experience a South Africa holiday or South African Safari? Does it mean people will stop travelling to and holidaying in South Africa? Does more expensive airfares lead to decreased spend and a move to cheaper accommodation? These are questions Jonathon was asked last night by Dorine, one of South Africa’s Tourism Update journalists. The article was uploaded this morning on www.tourismupdate.co.za. We’ve put a copy here for you to read (below the elephant).
Aussies won’t spend less in SA
30 Thu, Sep 2010
by Dorine Reinstein
After V Australia announced in the beginning of September that it would axe its Johannesburg route in February 2011, the industry expressed concern about the impact this would have on Australian travellers to South Africa. The main concern was not that tourists would stop travelling to the country, but that the more expensive airfares would lead to decreased spend as well as a move to cheaper accommodation.
Monika Iuel, Sales and Marketing Director Your Africa, says costly airfares are definitely something that impacts on passenger numbers from a source market. She says: “Fact is that South Africa is one of the few countries in the world – along with Australia, interestingly enough – with almost no inbound charter flights, therefore scheduled airlines dictate the pricing and that keeps the airfares high in general, resulting in a very high package price for international tourists.” She explains that in an average three-star self-drive two-week holiday, the airfare from any European country constitutes 50% of the total cost. According to Iuel, the land portion is a comparatively low segment of the total cost. “I wouldn’t be convinced that potential visitors would consider booking three-star instead of four-star accommodation as that wouldn’t create much of a reduction of the total price.”
When looking at South African Tourism’s statistics, Australians have never been big spenders in South Africa. Arrivals to South Africa are higher from Australia compared with major Asian countries. However, their spend per trip is lower than that of visitors from these Asian countries, research indicates. The appreciation of the Australian dollar relative to the rand seems to have a much greater impact on spend in South Africa. Bashni Muthaya, Manager South African Tourism, says there is no trend that indicates that countries with higher airfares to South Africa spend less in the country. The only noticeable trend Muthaya has witnessed in the past year is the impact of the financial crisis. She says: “While for all foreign tourists to SA, spend in SA has not declined in 2009, we did notice a decline from the Americas and Europe, the markets hardest hit by the global financial crisis. The strengthening of the rand always plays a part in the numbers we report as we report our spend data in nominal terms.”
Jonathon Wilson, Director Encompass Africa, doesn’t predict a huge impact on tourism to South Africa. “There might be some long-term after effects but in the short term, possible high airfares are counterbalanced by the strong Australian dollar.” Added to that is the fact that the Australian Competition and Consumer Commission has warned both SAA and Qantas the commission won’t tolerate price gouging on the SA route, Wilson says. Lastly, he points out, SAA and Qantas will still have a lot of capacity to fill to South Africa, even with V Australia out of the picture.