Page 38 - TKZN Annual Report 2023/2024

Therefore, the tourism sector needs to transform through collaborative efforts from both private and public sector interventions. The successful transformation of the sector in the next few years requires intensive monitoring efforts, awareness programmes, facilitation of black-owned enterprises to reach maturity and the promotion of black empowerment in the private sector.
Looking Forward: Tourism Demand Forecast and Emerging Strategic Focus
The forward-looking context was provided by the President of South Africa, Mr. Cyril Ramaphosa, during his SONA in June 2020, in which
he spelled out an ambition to more than double international tourist arrivals to 21 million by 2030.
South African Tourism uses Tourism Decision Metrics (TDM) developed by Oxford Economics as its forecasting tool. The model derives Global Tourism Demand (arrivals) by analysing economic drivers for 190 countries. It estimates that South Africa will receive 16.5 million international tourist arrivals by 2030, a global market share of 0.74%.
The demand forecast assumptions are as follows:
Global Tourism Demand Forecast
South Africa Forecast - Assumptions
Domestic Forecast - Assumptions
• Global unemployment will be reduced year-on-year in the forecast period.
• Consumer spending, which is the biggest driver of global tourism demand, is expected to grow by at least 4% in the next ten years.
• Global GDP to grow slightly slower by between 2–3% in the forecast period.
• The two economic drivers both have positive correlation to growth of global tourism demand.
• Consumer Price Index score to worsen from 211.8 to 344.
• Unstable inflation will make South Africa at least three times more expensive than an average destination.
• Rand against the US $ to depreciate from R13.2 to R17.
• The revenue generated per tourist is most likely to be higher than usual.
• However, the exchange rate index will move from 88.9 to 89.
• Although still cheap, South Africa will be moving towards an expensive destination trajectory compared to other destinations.
• Aggregate competitive index score for South Africa will remain at 101.8 through the forecast period.
• South Africa’s brand appeal will remain average.
• Performing worse on regulatory framework indicators and human, cultural and natural resources.
• Consumer spending to increase between 4–5%.
• GDP to increase between 2–3 %.
• Affordability to continue to be the
main barrier to travel.
• Outbound travel also to be a
strong competitor to the defend segment and is projected to grow by CAGR2018-2030 at 2.5%.
In light of the major barriers preventing people from visiting South Africa – safety, travel and appeal of other destinations – the tourism sector needs to understand and address the leakages at the various stages of the brand journey.
36 TOURISM KWAZULU-NATAL ANNUAL REPORT 2023/2024