South Africa tourism grows from strength to strength

New research reveals the strength of South Africa’s growing travel and tourism industry. It has now been pinpointed on the property investment map as a hotspot for positive cash flow returns.

South Africa is an extensive country with a long coastline framed by stunning white beaches. It boasts a great diversity of scenery and climate, allowing buyers to enjoy an exciting lifestyle and holiday destination.

During the 1990s, South Africa came out of the political wilderness and since then government policy has been firmly committed to encouraging foreign investment by bringing in policies to ease the way for property investors. A steady economy, with an increasing tourist industry and a fast growing internal market, combine to make South Africa a strong proposition for property investors.

The United Nations World Tourism Barometer notes South Africa’s good performance in 2007, growing 9% and representing over 30% of all arrivals in Africa. The country has benefited in many ways from the weaker rand, which, according to the UN has “enhanced the country’s image as a destination offering good value for money.”

The World Travel and Tourism Council (WTTC) estimates that in 2007, South Africa’s travel and tourism industry posted US$ 31.2bn and is expected to grow to US$ 60bn per annum by 2017. For South Africa, WTTC presumes travel and tourism activity will grow at a rate of 4.4% per annum, in real terms, between 2008 and 2017. Considering the annual global growth rate of the industry is expected to be 3% in 2008, South Africa is performing well and above average.

South Africa is benefiting positively from advanced publicity surrounding the 2010 FIFA World Cup and the 2009 Lions Tours, both due to take place in the country. Nevertheless, poor airline access and the cost of air travel have dampened the demand from some sources. However, demand for the area as a tourist destination could increase to unprecedented levels if an Open Skies agreement was to be negotiated.

ETurbo News, an online global travel industry news provider, stresses the need for an Open Skies agreement in the country in a recently published article: “This political restriction of our skies is inefficient and hurts not only our tourist industry but also the development of South Africa as a regional hub for international business. Tourism is South Africa's biggest industry sector and shows rapid growth, in line with world markets. We should do more to encourage this if we want good jobs.”

It remains to be seen when and if South Africa will join other world leaders in encouraging tourism still further, to its greatest potential. Meanwhile, as ever, those investing prior to any Open Skies agreement are likely to see strong returns in the future.

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