Published On: Wed, Apr 15th, 2015

High cost of living challenges SA tourism



JOHANNESBURG – THE substantial rise in the cost of living poses a challenge for South Africa’s tourism business, a banking official warned.

Wiza Nyondo, Head of Niches at First National Bank Business, said amid the surge in the cost of living, consumers would be wary on discretionary expenditure.

“Any negative adjustment in disposable income will always be a concern as it limits the possibility of travelling.

“Even though the tourism industry has proven its resilience over the years, the main issue is that the current costs affecting consumers are unavoidable,” said Nyodo.

He noted that people were obligated to pay tax, need water and electricity so the possibility of scaling-back on activities such as travel was high.

Nyondo said the current conditions also placed pressure on tourism businesses to devise new ways and packages to attract domestic visitors.

“An important factor to consider is that consumers will be doing more with less, therefore, tourism businesses need to offer cost effective ways of meeting customer needs, such as offering group packages and combining certain offers at discounted rates,” Nyondo said.

The month of April has seen a significant rise in the cost of living for many South African citizens due to the increase in electricity and water tariffs, as well as tax hikes for middle-to-high income earners.

Recently, the South African Reserve Bank (SARB) cautioned that the weakness of the Rand and rising oil prices could lead to inflationary pressure.

In addition, economists have warned of a possible rate hike before the end of this year as a way to further stabilise the local economy.

In contrast to the challenging conditions faced by local tourism, South Africa should be able to sustain its international appeal as a tourist destination, Nyondo however said.

“Overall, we are well positioned to attract international travellers and the weakness of the rand will continue to play a big part in ensuring that South Africa remains an attractive destination.”

– CAJ News


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