After a long period of relative inactivity in travel insurance policy sales, we are seeing the market picking up. The travel industry in South Africa will rebound. Even though we are a small part of the worldwide economy, it is absolutely essential for corporate South Africa and vital for our leisure travellers to experience what the world has to offer. We have been travellers for decades and Microsoft Teams and Zoom will not stop that necessity or desire, says TIC’s head of travel insurance, Jason Veitch.
Internationally, the US and UK in particular are steaming ahead with their vaccine roll-out and we expect the introduction of vaccine apps and passports to soon spur a new way of travel. Vaccination will become a requirement to travel similar to a visa, and those who are reluctant to take the vaccine will find themselves left behind and cut off from the world. Even though South Africa’s vaccine roll-out is taking place at a slower pace than internationally, we are on track to receive 30 million doses of the single-shot Johnson and Johnson vaccine, which will soon be readily available around the country due to collaborative public- and private-sector initiatives. It is also highly unlikely that our third wave will be nearly as devastating as we have seen in other places, as our outlook in South Africa has been substantially more cautious than in other parts of the world, right from the start.
Our latest stats (which predominantly reflect international travel bookings taking place in South Africa) show that South Africa’s international retail leisure market remains very constrained – a trend that is likely to continue until South Africa catches up with its vaccine roll-out. This is due to the effect of the bad publicity about the ‘SA Variant’. We estimate that the international leisure market is operating at only 22% of 2019’s levels. Big corporates are also still not travelling in large numbers, concerned about duty of care for their employees, and we estimate that these sales are also around 20% of 2019’s levels at present.
However, we are also seeing recovery, especially in agencies that have a good spread between their corporate and leisure clients. Short hall trips into Africa for SME businesses have really picked up. The growth in the independent travel consultant market is also very apparent and some of our ITC groups are flying, while many established businesses are still struggling.
A great initiator of travel confidence at this time has been the flexible terms and conditions that many suppliers around the world are implementing to entice clients to start booking again. Those that are not offering flexible terms are losing out to their competitors and this increasing consumer-driven pressure is spurring an industry-wide movement.
Overall, for the first time in a while, we find ourselves cautiously optimistic. There are bright lights on the horizon and it is our belief that we will remain in this cusp period for another four to six months before the industry starts to show widespread recovery.