Travel & Tourism - South Africa

South Africa

South Africa's Travel & Tourism market is projected to reach a revenue of US$2,391.00m by 2024.
The market is expected to show an annual growth rate of 5.92%, resulting in a projected market volume of US$3,187.00m by 2029.
The Hotels market is the largest market in the market and is expected to have a projected market volume of US$1,156.00m by 2024.
By 2029, the number of users in the Hotels market is expected to amount to 9.74m users.
In 2024, the user penetration rate is projected to be 19.3%, and it is expected to increase to 22.8% by 2029.
The average revenue per user (ARPU) is projected to be US$203.40.
In South Africa's Travel & Tourism market, online sales are expected to generate 66% of the total revenue by 2029.
In comparison with other countries, United States is projected to generate the highest revenue in the market, with US$214bn in 2024.
South Africa's travel and tourism industry is currently experiencing a rise in demand for sustainable and eco-friendly tourism options.

Key regions: Malaysia, Europe, Singapore, Vietnam, United States

Definition:

The Travel & Tourism market encompasses a diverse range of accommodation services catering to the needs and preferences of travelers. This dynamic market includes package holidays, hotel accommodations, private vacation rentals, camping experiences, and cruises.

Structure:

The market consists of five further markets.

The Cruises market covers multi-day vacation trips on a cruise ship. The Cruises market encompasses exclusively passenger ticket revenues.
The Vacation Rentals market comprises of private accommodation bookings which includes private holiday homes and houses as well as short-term rental of private rooms or flats.
The Hotels market includes stays in hotels and professionally run guest houses.
The Package Holidays market comprises of travel deals that normally contain travel and accommodation sold for one price, although optional further provisions can be included such as catering and tourist services.
The Camping market includes bookings at camping sites for pitches using tents, campervans, or trailers. These can be associated with big chains or privately managed campsites.

Additional Information:

The main performance indicators of the Travel & Tourism market are revenues, average revenue per user (ARPU), users and user penetration rates. Additionally, online and offline sales channel shares display the distribution of online and offline bookings. The ARPU refers to the average revenue one user generates per year while the revenue represents the total booking volume. Revenues are generated through both online and offline sales channels and include exclusively B2C revenues and users for the above-mentioned markets. Users represent the aggregated number of guests. Each user is only counted once per year. Additional definitions for each market can be found within the respective market pages.

The booking volume includes all booked travels made by users from the selected region, independent of the departure and arrival. The scope includes domestic and outbound travel.

Prominent players in this sector include online travel agencies (OTAs) like Expedia and Opodo, as well as tour operators such as TUI. Specialized platforms like Hotels.com, Booking.com, and Airbnb facilitate the online booking of hotels and private accommodations, contributing significantly to the market's vibrancy.

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Analyst Opinion

South Africa's Travel & Tourism market is experiencing significant growth and development, driven by various factors shaping consumer preferences and market trends.

Customer preferences: Travelers in South Africa are increasingly seeking unique and authentic experiences, driving the demand for cultural and eco-tourism. Tourists are looking to immerse themselves in the local culture, interact with communities, and explore the country's diverse natural landscapes. Additionally, there is a growing interest in sustainable travel practices, with travelers preferring eco-friendly accommodations and activities.

Trends in the market: One of the key trends shaping the Travel & Tourism market in South Africa is the rise of domestic tourism. As more South Africans opt for local travel destinations, there has been a surge in demand for accommodation, transportation, and experiences within the country. This trend is fueled by the desire to support local businesses and explore the hidden gems of South Africa. Another notable trend is the increasing popularity of adventure tourism in South Africa. The country's diverse terrain offers a wide range of adventure activities such as safaris, hiking, and water sports, attracting thrill-seeking travelers from around the world. Adventure tourism has become a significant driver of growth in the market, with tour operators and accommodations catering to this niche market.

Local special circumstances: South Africa's Travel & Tourism market is uniquely positioned to benefit from its rich cultural heritage and natural beauty. The country offers a wide variety of attractions, including wildlife reserves, pristine beaches, and vibrant cities, making it a popular destination for both domestic and international travelers. Additionally, South Africa's favorable climate and world-class infrastructure contribute to its appeal as a tourist destination. Furthermore, the country's diverse population and multicultural society provide a unique opportunity for travelers to engage with different communities and traditions. This cultural richness adds a distinctive flavor to the overall travel experience in South Africa, setting it apart from other destinations in the region.

Underlying macroeconomic factors: The growth of South Africa's Travel & Tourism market is also influenced by macroeconomic factors such as currency exchange rates, political stability, and infrastructure development. Fluctuations in the exchange rate can impact the cost of travel for international tourists, affecting their decision to visit the country. Political stability is crucial for maintaining a safe and welcoming environment for travelers, while ongoing investments in infrastructure are essential for supporting the growth of the tourism industry.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on bookings, revenues, and sales channels of hotels, vacation rentals, cruises, package holidays, and camping.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on a specific rationale for each market. As a basis for evaluating markets, we use financial reports, the Global Consumer Survey, third-party studies and reports, data from industry associations (e.g., UNWTO), and price data of major players in respective markets. To estimate the number of users and bookings, we furthermore use data from the Statista Consumer Insigths Global survey. In addition, we use relevant key market indicators and data from country-specific associations, such as country-related GDP, demographic data (e.g., population), tourism spending, consumer spending, internet penetration, and device penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, ARIMA, which allows time series forecasts, accounting for stationarity of data and enabling short-term estimates. Additionally, simple linear regression, Holt-Winters forecast, and exponential trend smoothing methods are applied. A k-means cluster analysis allows for the estimation of similar countries. The main drivers are tourism GDP per capita and respective price indices.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change.