Tourists spending more in South Africa

15 June 2010

A new report by Visa shows a 34% increase in inbound tourism spending in South Africa during the first quarter of the year, and anticipates additional growth from the 2010 Fifa World Cup.

These were among the findings of “Tourism Outlook: South Africa”, an annual report that analyses Visa cardholder spending over the past two years. The report is based on VisaVue travel data, a tool that analyses cardholder spending patterns worldwide.

“VisaVue travel data indicates that South Africa weathered the economic headwinds which impacted international tourism during 2009 better than most countries around the world,” Visa said in a statement this week.

Continued optimism

While many countries saw double-digit drops in inbound tourism spending, Visa cardholder spending by international visitors to South Africa decreased only 2.7% from US$1.84-billion in 2008 to $1.79-billion in 2009.

Despite a challenging climate in 2009, 2010 has already shown reasons for the country’s continued optimism – during the first quarter of 2010, Visa cardholder spending increased to nearly $566-million, up from $423-million during the first quarter of 2009.

The top contributors to South Africa’s inbound tourism spending in 2009 include: The United Kingdom (26%), United States (15%), Mozambique (5%), Germany (4%) and France (4%).

Emerging market tourists

While travellers from Western Europe and the US continue to be the strongest contributors to South African tourism, significant increases in spending by cardholders from emerging markets is indicative of South Africa’s growing stature as a tourism destination.

Visa data revealed double- and triple-digit growth in spending by cardholders originating from Malawi (168%), Mozambique (118%), Angola (115%), China (28%) and Botswana (18%).

“This significant growth can also be attributed to developments in payments infrastructure and increased adoption and use of digital currency by consumers in developing markets,” said Visa.

World Cup boost

As host of the World Cup, South Africa is uniquely positioned to enhance its visibility globally, Visa says, adding that the tournament will provide South Africa with a significant opportunity to showcase its unique assets and culture to the world and attract visitors and tourism revenues for years to come.

The month-long World Cup is expected to add R93-billion to the South African economy, translating to a 0.54% boost to gross domestic product, a significant contribution given that the total South Africa GDP growth in 2010 is estimated at 2% to 2.5%.

“The influx of international tourism surrounding the [World Cup] has helped to support continued infrastructure developments and economic growth within South Africa,” said Visa Sub-Saharan Africa GM Charles Niehaus.

“As a long-time partner to Fifa and the tourism industry, Visa is committed to delivering a secure, reliable and convenient payments system to South Africa consumers and merchants, and providing current spending information that can help businesses and the government to enhance inbound tourism arrivals and revenues.”

Retail purchases rule

Consistent with tourism spending trends over the past three years, retail purchases continued to account for the largest share of tourism spend on Visa cards in South Africa in 2009, followed by travel-related purchases such as lodging, airlines and travel agencies.

During the first quarter of 2010, the largest merchant segments for South Africa inbound tourism spending, based on transaction volume, were general retail-related purchases such as clothing and food-related transactions.

Several merchant segments showed significant growth over first quarter 2009 levels: Visa cardholder spending in the restaurant segment increased 48%, lodging purchases increased 41%, general retail purchases increased 32%, auto rentals increased 29%, and airlines saw a 19% increase.

SAinfo reporter