Tourism growth sets the stage for rising real estate sales
Category RealADVICE
SA's tourism industry has rebounded remarkably post-Covid, with the number of visitors last year reaching almost 8m in the 11 months to end-November, according to StatsSA.
"This number is only about 18% down on the same period of 2019, and does not include the year-end holiday season, which airlines, tour operators and hospitality establishments around the country are celebrating as one of the busiest on record," notes Gerhard Kotzé, CEO of the RealNet property group.
"And top property practitioners are celebrating alongside them, even though the word tourist implies a person that will only be visiting South Africa for a limited time and is not intending to buy a property here."
There are two main reasons for this, he says, the first being that the tourism industry is a major creator of employment, and the second being that tourists provide a major injection of cash into the SA economy.
"In addition, we have observed that a rising number of tourists to SA are actually checking it out as a long-term retirement destination or as a favourable place to buy a second home, and will often look at some real estate options during their visit. Some are also long-term expats considering a return to SA."
According to the World Tourism Organisation, every direct job in the industry supports about 1,5 additional indirect jobs, including employment for guides; transport drivers; airport staff; booking staff; food and beverage suppliers and arts, crafts and souvenir creators.
"Tourism also creates many opportunities for entrepreneurism and is a very inclusive industry, and this has extremely important implications for SA with its slow economic growth rate and high unemployment," says Kotzé. "The latest available statistics show that the industry currently accounts for around 1m direct jobs - and thus some 2,5m jobs in total.
"In addition, the World Travel and Tourism Council estimates that these numbers will almost double over the next decade, enabling millions more South Africans to participate fully in the economy and, from a real estate point of view, to become homeowners, tenants, landlords and property investors."
What is more, he notes, the tourism sector is expected to grow by almost 8% a year during that time, while the economy as a whole is only growing at 1% or 2% a year currently. "This would boost the sector's contribution to the country's GDP from around 4% to some 7,4%, and in the process bring billions of Rands worth of additional revenue into the country.
"This money could be put to use in many positive ways, including the funding of some infrastructure repair and upgrade projects already planned, training and job creation in other industries, and social and affordable housing projects to really help the country replace and eventually eliminate informal housing settlements.
"And that would of course make it even more attractive to tourists and potential property investors from abroad, and create a virtuous circle of further employment, home ownership and even more spin-off revenue generation in many other industries."
Author: RealNet
