Inflation and a more stable US Dollar currency being used in neighbouring countries has reduced SA’s competitive advantage.
For a three to four-year period, South Africa offered enormous value for money, however, inflation and a more stable US Dollar currency being used in neighbouring countries has reduced this competitive advantage.
As of late, South Africa’s affordability and value offering has come into question alongside the rise of emerging African destinations like Kenya and Namibia that are offering visitors alternative African travel experiences outside of the mainstream reputation that South Africa has built up over the years.
Martin Wiest, CEO at Tourvest Destination Management, believes that this shift in the market has less to do with perceptions around recent water restrictions in Cape Town and political discourse around land expropriation, and more to do with the perception of crime levels and complex visa regulations in the destination, as well as current growth in East Africa.
Emerging destinations are showing significant growth in the market, and starting to give South Africa some healthy competition, while South Africa’s numbers begin to stagnate in some source markets.
“Increased air access to other parts of Africa, relaxed visa regulations and new experiences all play a role in opening up the rest of the continent,” says Wiest. “However, a free market economy over time, will find the right balance by itself, especially in a dynamic rate environment. The decline in volume currently suggests that there is an imbalance, which will, if sustained, drive prices down until the equilibrium is met again.”