SA tourism's tale of two markets: Regional visitors surge as overseas arrivals lag - IOL

The shortfall in overseas arrivals during 2025 alone cost South Africa R6.5 billion in foreign direct tourism spending, before accounting for the broader economic effects.

South Africa welcomed 6.6 million international tourists in the first seven months of 2026, but a surge in regional visitors is masking a slower recovery in overseas markets, with billions of rand in potential tourism spending still at stake.

BDO South Africa’s latest Tourism Trends Report showed that arrivals increased by 12% compared with the same period last year and were 12% above 2019 levels.

However, African visitors accounted for 5.2 million arrivals, up 17% against 2019, while overseas arrivals reached 1.37 million, remaining 5% below their pre-pandemic level.

BDO estimated that the shortfall in overseas arrivals during 2025 alone cost South Africa R6.5 billion in foreign direct tourism spending, before accounting for the broader economic effects.

According to Statistics South Africa’s Tourism Satellite Account, published in March, the sector directly employed an estimated 953,981 people in 2024, accounting for 5.7% of total employment.

Tourism added 185,158 jobs that year and contributed R361.7 billion, or 4.9%, to gross domestic product. Total tourism spending in South Africa reached R779.2 billion in 2024, although domestic visitors accounted for 85% of that amount.

Spending by international visitors remained below pre-pandemic levels at R113.9 billion, compared with R121.5 billion in 2019, according to Statistics South Africa.

These are the latest Tourism Satellite Account estimates and relate to 2024, rather than the current arrivals figures.

“The tourism industry in South Africa has changed quite significantly since the country’s heyday in 2018 and 2019,” said Lee-Anne Bac, director in advisory services at BDO South Africa.

Bac added that “a return to the industry of old is unlikely, and that means industry players need to be adapting their strategies accordingly. The market is more nuanced now, not necessarily defined by country, but rather by lifestyle and life stage.”

BDO’s report showed that strong regional performance extended across the first seven months, with arrivals from Mozambique increasing by 30%, Zimbabwe by 12% and Lesotho by 15%.

However, African air arrivals lost momentum during the middle of the year. After increasing by 16% in the first four months, they declined by 2% between May and July compared with the corresponding period last year.

BDO linked the slowdown to reported Afrophobic tensions, although the arrivals figures themselves do not establish the cause.

Government has set a target of attracting an additional 750,000 international air arrivals by the end of 2027.

BDO found that just 18,000 Chinese tourists visited South Africa between January and July, leaving arrivals 67% below their 2019 level and 24% lower than a year earlier.

India remained 49% below its 2019 level, with arrivals declining by a further 31% compared with the first seven months of 2025.

Statistics South Africa’s July figures showed a similar pattern. Chinese arrivals fell by 20% to 2,669, while arrivals from India declined by 26.9% to 3,808.

BDO identified limited direct flights, disruption to routes through the Middle East and the need to better understand these markets as continuing challenges.

This was despite the introduction of the Trusted Tour Operator Scheme in February 2025. The Electronic Travel Authorisation system was officially launched in August 2026, after the period covered by the arrivals data.

The increase in arrivals has also not been matched by equally strong growth in accommodation income.

In a July tourism update, Investec economist Lara Hodes noted that income from tourist accommodation, excluding restaurant and bar sales, increased by 2.2% year-on-year in May, slowing from 5.9% in April and 13.7% in March.

Hotels recorded growth of 2.8%, while other accommodation establishments, including lodges, bed-and-breakfasts and self-catering properties, increased income by 3.7%.

“However, as geopolitical risks recede and travel sentiment improves, the South African tourism sector is likely to benefit from ongoing efforts to enhance the visitor experience. Including, visa reforms, improved air connectivity, targeted safety initiatives and investments in tourism infrastructure. Indeed, tourism continues to be a critical driver of economic growth and employment in South Africa,” said Hodes.

The tourism sector directly employed an estimated 953,981 people in 2024, accounting for 5.7% of total employment.

BDO, meanwhile, said South Africa needed to adapt to changes in international tourism rather than relying on a return to pre-pandemic travel patterns.

“Competition is certainly more aggressive and coming from previously unrecognized countries and regions. This raises the question: is South Africa appropriately structured to cope with these changes?

"Based on current performance, the answer is clearly ‘no,’ except perhaps for select destinations such as Cape Town and upmarket game lodges,” said Bac.

The firm called for stronger international marketing, improved air connectivity, an air access development fund and greater attention to crime and urban decay. Government has set a target of attracting an additional 750,000 international air arrivals by the end of 2027.