December already looking surprisingly good for SA’s tourism sector
December is looking surprisingly good for tourism so far, with airlines and accommodation bookings starting to pick up, despite the state of the economy leaving many consumers struggling financially and more pain being on the way in the form of increased inflation and interest rates.
The tourism industry is now celebrating, after all Covid restrictions were lifted and it looks as if consumers are ready to have a ‘normal’ holiday again after the Omicron variant disrupted many holiday plans in December last year, and the third wave took them back into stricter lockdown in December 2020.
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Bookings for tourism flights in December looking promising
Kirby Gordon, chief marketing officer at FlySafair, says although it is still quite early to really comment on the December bookings, forward sales look promising and a few dates are already emerging where flights are starting to pick up.
Not everyone books six months in advance, but it is better to book in advance. There has been a notable spike in bookings for flights to Mauritius.
He says the average price of a December ticket on the domestic market is still much lower than for December 2021, but this is a function of time.
“The first seats we sell are the cheaper ones and the more expensive seats are those sold close to departure. We are now still selling some of the cheaper seats and that keeps the 2022 average down.”
It is tough to predict exactly where the average price for 2022 will end up, he says, because it depends on so many factors.
“With inflation driven by the cost of oil, all prices are increasing, which could mean a higher average price, but it could also mean that people will have less disposable income as a result of increased living costs, which will then put a squeeze on demand and would keep prices down.”
FlySafair is planning more flights as more aircraft come online, has so far published a schedule for 3 162 flights in the month of December, already 8% up from December 2021. This is expected to further increase significantly.
Gordon says he does not expect local airlines to face the same problems as in Europe and the USA, as the airline did not retrench any staff due to Covid, while also actively recruiting to grow its team.
“There’s a lot of great talent out in the market at the moment and we’re pleased to be welcoming the best.”
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Domestic airfare remains the same for tourism in December
Simon Newton-Smith, SAA’s interim executive: Commercial, says SAA is already seeing strong demand for December compared to last year, with bookings for Cape Town, Durban and Mauritius increasing by 50% in the last month.
“Despite the recent market-wide capacity reduction, we made no change to our domestic fare structure, but lower priced tickets are selling out faster. Additionally, given the underlying increase in global oil prices, fuel surcharges are expected to increase.”
SAA has recently doubled its Cape Town flyights, and nearly doubled Durban flights, while also expecting to maintain this through the December travel period.
“We still have the option to increase capacity with widebody aircraft but will make that assessment closer to the time.”
Newton-Smith says SAA is not anticipating the same resource issues as the US and Europe where restrictions were lifted just before the peak summer travel season.
“Airlines did not have time to build back the staff numbers to handle the demand but our recovery has been more gradual and we expect business as usual.”
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Accommodation for December also looking good
Hannelie du Toit, chief operating officer at Satsa, says accommodation bookings also look good.
“Many hotels and lodges in key tourism spots, such as Knysna, the Drakensberg and Plettenberg Bay are between 75% and 100% booked. These bookings are made as much as a year in advance. There are some international tourists, but the majority of bookings are from South Africans.”
Are people opting for shorter holidays? Du Toit says the length of stay is mostly the same as in 2021 and 2020 and there is even a trend for longer stays.
They are also not opting for cheaper options.
“There is always price sensitivity, but it seems that people are willing to pay the going rate without discounts for peak periods.”
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Top destinations for tourism
Sue Garrett, general manager: supply, pricing and marketing at the Flight Centre Travel Group, says December flight bookings are slow so far, with only 3.57% of the company’s current bookings for travel in December 2022.
“However, we will always see pockets of trends month on month, but December lead times are slowly increasing and customers are planning ahead more.”
She says the top destinations so far are the UK, Thailand, Australia, the US and Mauritius, while in 2019 the most popular destinations were the UK, US, Thailand, Australia and South Africa.
The average price for domestic flight tickets for December 2022 is R1,945 per person, while international flight tickets for December cost an average of R13 000 per ticket.
Lead times for accommodation booking are also very slow at this stage, with only 1% of overall package holidays booked so far for travel in December, but bookings for Thailand are starting to spike with close to 5% over the past 10 days.
“Thailand is the top destination, followed by Zanzibar and South Africa in terms of room nights booked,” Garrett says.
