Tourism consumption triples, can it now reach R1trn?

When President Cyril Ramaphosa’s office recently indicated that South Africa could achieve 3% economic growth by 2029, compared with just over 1% if structural reforms continue at their current pace, it highlighted an important opportunity for the country.

As reforms continue to take hold across electricity, rail and freight logistics, water and the visa system, they are removing some of the barriers that have constrained investment and economic growth for years.

It is still early days, but the direction is encouraging.

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The next step is to ensure these reforms translate into more investment, more jobs and more inclusive economic growth. Tourism is one of the sectors well positioned to help achieve this.

The growth in tourism consumption over the past decade shows the scale of that opportunity.

In 2015, tourism consumption in South Africa stood at R249.7 billion.

By 2024, according to Statistics SA’s Tourism Satellite Account, it had grown to R779.2 billion.

That represents growth of more than 200% over the period and puts an important milestone within sight: a R1 trillion tourism consumption economy.

This is an exciting trajectory for the sector, but it also demonstrates why tourism should increasingly be viewed as an important part of South Africa’s broader economic growth story.

The opportunity now is to accelerate that growth.

Visa reforms

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One of the most significant reforms for tourism has been the work undertaken through Operation Vulindlela to modernise the country’s visa regime.

Last week, Ramaphosa officially launched South Africa’s Electronic Travel Authorisation (ETA), marking another important step in making it easier for international visitors to travel to our country.

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The ETA, along with the Trusted Tour Operator Scheme and broader efforts to simplify visa processes, are about much more than administrative efficiency. They make it easier for travellers to choose South Africa and strengthen the case for airlines to invest in new routes and additional capacity.

Importantly, this progress has not been achieved by government alone.

The government-business partnership has brought the public and private sectors together to support structural reform, recognising that sustainable economic growth depends on collaboration.

Tourism has been identified as one of the sectors capable of contributing to that growth.

The next phase of the partnership includes an aspirational target of increasing international airline arrivals from approximately 3.05 million to 3.8 million within the next 18 months, and land and sea arrivals from 7.5 million to 8.1 million.

When combined with continued growth in domestic tourism, increasing visitor numbers will have a significant impact on employment and further increase tourism’s contribution to South Africa’s GDP.

The economic case for tourism is compelling.

Jobs and investment

According to Statistics SA’s Tourism Satellite Account, tourism directly contributes almost R400 billion to South Africa’s GDP and directly supports more than 950 000 jobs.

Today, one in every 18 employed South Africans works directly in tourism.

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The tourism sub-sectors that generate this impact range from aviation and accommodation to restaurants, transport, retail, agriculture, arts and culture, and others.

As we work to attract more visitors, there is another important question we must consider: where will these additional visitors go?

Many will naturally visit South Africa’s best-known tourism destinations.

Cape Town continues to rank among the world’s most attractive cities for international travellers. Johannesburg remains the country’s commercial gateway and a leading destination for business tourism.

Durban’s beaches, warm climate and growing hospitality offering continue to attract domestic and international visitors, while the Kruger National Park remains one of Africa’s premier wildlife destinations.

However, South Africa’s tourism opportunity extends far beyond these established destinations.

Through the Tourism Business Council of South Africa and TOMSA, the private sector recently launched the second phase of the international ‘Don’t Say We Didn’t Tell You’ campaign featuring Trevor Noah, inviting the world to experience South Africa.

Beyond traditional hotspots

One of the deliberate decisions during the development of the campaign was to showcase destinations beyond the country’s traditional tourism hotspots, highlighting places across the Eastern Cape, North West and other provinces.

As South Africa works towards attracting millions more visitors, the opportunity is not simply to bring more tourists into the country. We also need to encourage them to experience more of South Africa.

Doing so will allow tourism to spend to reach more communities, support more businesses and create economic opportunities across more parts of the country.

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The tourism sector is also investing in making these destinations more competitive. The private sector has supported tourism safety initiatives, including Durban’s Coastal Tourism Policing Initiative and the deployment of Tourism Safety Officers in Nelson Mandela Bay.

These are practical examples of how collaboration between government and the private sector can improve visitor confidence and strengthen South Africa’s tourism offering.

Tourism as a growth engine

That is why tourism should be viewed as far more than a leisure sector. It is a powerful economic multiplier.

Every improvement in visa processing, air connectivity, destination marketing and visitor safety creates opportunities for more investment, more jobs and stronger regional economies.

South Africa’s structural reforms are laying the foundations for stronger economic growth. Tourism is one of the sectors best placed to turn those reforms into measurable economic outcomes.

The progress of the past decade gives us good reason to be optimistic.

Reaching the R1 trillion mark would be an important milestone, but the real opportunity lies in what that continued growth can mean for jobs, investment and communities across South Africa.

Achieving 3% economic growth should be seen as the beginning of the journey. South Africa needs significantly higher growth to address issues such as unemployment, poverty and inequality effectively.

The tourism sector has consistently demonstrated its ability to act as a catalyst for economic development.

Tshifhiwa Tshivhengwa is CEO of the Tourism Business Council of SA. 

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