INDUSTRY players are already
feeling a huge impact on
business since Standard
& Poor’s Global Ratings cut
South Africa’s sovereign credit
rating to junk status on April 3
after President Jacob Zuma’s
cabinet reshuffle on March 30.
Bookings and sales are
expected to plummet after the
peaks the trade hit earlier this
year.
Mary Shilleto, ceo of
Thompsons Travel, says it has
been doom and gloom for
the industry since the cabinet
reshuffle – and it just keeps
getting worse.
The rand was in a good place
at the beginning of this year.
Inflation dropped to an annual
rate of 6,3% in February from
6,6% in January. On March 23,
the rand inched to R12,50 to
the dollar – its best level since
2015. “This made consumers
feel upbeat and encouraged
them to spontaneously splurge
on travel,” Mary says, adding
that the agency raked in sales
during January, February and
March. “A mere week later,
the rand crashed, causing
consumers to immediately
panic and settle booking
payments before it got any
worse.”
At the time of going to print
the rand was sitting at R13,84
to the dollar.
Michelle Bergset, chief
operational officer of Pentravel,
agrees. “March was the
highest revenue month in the
history of Pentravel by 40%. In
the last week of March we saw
many full payments come in to
avoid price increases and now,
the enquiry front has gone
quiet,” she says.
Terry Munro, md of
Beachcomber Tours, says most
tour operators have already
increased their prices for all
new bookings since the crash.
“The rand is in a very volatile
situation and will continue to
weaken, so we are advising
clients to pay so as to keep
the rate when booked.”
In January and February,
due to the strong rand,
Beachcomber saw 45% (this
figure has been updated since
the article on page 4 was
printed) and 23% increases in
overall bookings respectively,
compared with the same
periods last year. Now, Terry
predicts consumers will
choose local over international
travel and that sales will drop
by as much as 10% with
immediate effect.
Michelle forecasts that
leisure travellers will opt for
visa-free destinations, shorter
holidays and that they’ll
start booking with a shorter
lead time. “Consumers will
undoubtedly demand peace
of mind by securing the best
deal at the time of booking.
Family travel and cruising will
increase as both offer allinclusive
options and ‘better
bang for your buck’ holidays,”
she says.
From a corporate perspective,
Mary says travellers will have
to cut back on business trips.
“Earlier this year, companies
were optimistic due to the
flourishing economy and
corporate travel was peaking.
Now, they’ve already begun
tightening the reins. This is
exactly what we didn’t want to
happen.”
