THE latest BSP figures for
the South African travel
sector show that travel
got off to a very slow start
in 2015. The industry BSP
stats for January showed
a 15% drop in domestic air
spend and an 11% drop
in international air spend.
Industry experts attribute
the drop in numbers to
the negative outlook on
the South African economy
and continuing political
uncertainty.
Wally Gaynor, md of Club
Travel, says it hasn’t been the
best start to the year. Club
Travel has been performing
better than the industry, he
says, but sales are still flat.
The weak rand has had an
impact on international sales,
but domestic travel shows
an even greater drop. “On
the domestic side, there is a
generally negative sentiment
about the economy and
companies both small and
large are looking to save on
their travel spend,” Wally says.
Rod Rutter, XL Travel
coo, agrees, saying a weak
rand and a general lack of
consumer confidence could
be contributing factors. “Load
shedding could be a factor.
Corporates are reluctant to
leave home knowing their
families could be in the dark
for a couple of nights while
they are away.”
The negative trend is solely
ascribed to the current
economic conditions, says
Claude Vankeirsbilck, chief
sales and marketing officer
of Tourvest Travel Services.
He says corporates are under
immense cost pressures,
which means TMCs needs
to support customers in
finding ways to contain costs.
“This will be a trend that will
certainly continue for the rest
of the year,” says Claude.
“It’s simply a badly run
country right now, resulting in
higher unemployment and lack
of investment,” says Garth
Wolff, ceo of eTravel. The
South African travel industry
can expect a very tough year
ahead while the government
continues to chase investors
away, he says.
South African companies are
not investing for the moment,
agrees Mladen Lukic, gm of
Travel Counsellors. January
was relatively quiet for Travel
Counsellors, with only 1%
differential compared with
2014. February, on the other
hand, was a phenomenal
month with 38% increase in
sales compared with last year,
Mladen says.
He says most corporates
are increasingly suspicious of
service providers in general,
and there has been a move
away from the long and
standard five-year contracts.
“Companies have become
very careful who they do
business with. They want
their service providers to
show them value,” he says,
adding that in South Africa a
lot of TMCs are just chasing
overrides.
Sean Hough, ceo of
Pentravel, says January 2015
was Pentravel’s third-best
month ever, beaten only by
January 2014 and September
2014. “January saw a small
decline but against a record
month last year.”
However, Sean says there
is no question the industry
is operating in a tougher
environment with load
shedding, new immigration
rules and the weak rand.
“Ask anyone who has recently
returned from an overseas
trip, the weak rand is making
a massive dent and the
unabridged birth certificate is
causing uncertainty.”
Although industry players
agree that the BSP figures are
important, they also warn that
stats for January should be
taken in context.
Wally says that when
analysing BSP figures, it is
important to note that stats
do not include bookings made
with airlines such as FlySafair,
which don’t participate in BSP.
“Also on the international
side, the BSP will not show
tickets that have been issued
offshore to obtain better
availability and fares.”
Rod adds that January
is probably not the right
barometer to measure travel
trends for 2015. Although
forward bookings look soft
for the moment, he says it
could be too early to make
predictions.
Andrew Stark, md of Flight
Centre, agrees that January
is generally a strange month.
The drop in BSP sales for
January could partly be
attributed to negative yields
on airfares. He says airfares
(domestic and international)
have dropped considerably
this year compared with last
year, which means that yield
is down.
Despite the fact that
disposable income is down,
Andrew says demand for
travel from both the corporate
and the leisure sides remains
good.
