Introduction

Tourism is of vital economic and social importance to many countries around the world. Before the Covid-19 pandemic, which led to drastic changes in people’s mobility, travel and tourism accounted for one in ten jobs (330-million) globally and 10.30% of the world’s gross domestic product (GDP) (WTTC, 2022a).

Tourism is also a valuable contributor to the South African economy. Measured against other industries, tourism’s direct contribution to GDP is bigger than either agriculture, utilities (electricity, gas and water) or construction. The ‘Tourism Satellite Account (TSA) for South Africa’ report, compiled yearly by Statistics South Africa (Stats SA), states that the sector’s direct contribution to GDP was 3.70%, or R209-billion in 2019, before the pandemic crushed the sector (Stats SA, 2021).

To measure total contribution of travel and tourism to GDP, TSA relies on data from the World Travel and Tourism Council’s (WTTC’s) country report for South Africa. WTTC calculates the sector’s direct and indirect contribution to the economy in 2019 to be 6.90%, or R363.20-billion (Stats SA, 2021).

Travel restrictions implemented by countries to stop the spread of Covid-19 had a major impact on the tourism industry, cutting across all subsectors, from accommodation to aviation. South Africa’s borders were closed from the end of March 2020 to September 2020, preventing tourists from visiting the country. The emergence of new variants of Covid-19 in June and July 2021 also impacted on tourism as many countries prevented their citizens

Direct contribution of tourism to GDP: 2015 – 2019

Source: Tourism Satellite Account for South Africa, Statistics South Africa

Introduction

from traveling to South Africa. The UK government, for example, developed a red list, which comprised countries to which its citizens were prohibited from travelling. South Africa was on the red list from May 2021 to October 2021.

The WTTC country report estimates that the total contribution of travel and tourism to GDP declined by 55%, to R180-billion, in 2020. As pandemic restrictions eased, tourism rebounded and is estimated to have contributed about R195.20-billion to South Africa’s GDP in 2021 (WTTC, 2022b).

Tourism has been identified in the National Development Plan as being of economic priority given it is a labour-intensive sector that could contribute to achieving job creation targets. However, despite its recognised potential, the industry believes that government does not fully recognise or value tourism’s importance as an economic contributor.

The Inclusive Society Institute (ISI), in collaboration with the Tourism Business Council of South Africa, convened a tourism sector dialogue in June 2022 as part of a broader research project to develop a New Economic Blueprint for South Africa. The dialogue was attended by a wide range of organisations representing various subsectors within the tourism industry in the country, including the hospitality sector, the airline industry, travel agents, destination marketing agencies and hotel, resort and game lodge establishments.

This report gathers the tourism industry’s views on what South Africa must do to remove constraints to economic growth and development in the sector and offers suggestions on what could be done to accelerate and expand tourism’s contribution to GDP growth.