THE IMPACT OF BREXIT ON SA’S HOSPITALITY SECTOR.
The wise businessperson will be considering the broader effects of Brexit, not just on the economy in the United Kingdom, but on a global level, where the UK’s influence is felt. This is certainly true for the South African market – in particular, the hospitality sector.
Britain is one of South Africa’s top five source markets for travel, however the slightest change in the economic climate can negatively impact local businesses, especially SMEs whose profit margins can be small, but also larger concerns that need consistent growth in order to ensure job sustainability. Bear in mind that many of SA’s citizens have their ancestral roots in the UK and, conversely, there are many South Africans living in the UK. This also promotes travel between the two nations, since some may travel as frequently as annually to see friends and family.
It’s essential that government continues to try to reduce barriers to access at our borders, such as convoluted visa processes and the bewildering birth certificate regulations to promote ongoing travel. It’s imperative that a source market such as the UK, that is big enough to drive tourism growth, not be discouraged, particularly if the UK is coming to grips with the aftermath of Brexit.
Business travel should not be discounted. As many South African companies have head offices in the UK and many UK firms are seeking to expand their international offering, we can greatly benefit from encouraging investment. As a developing nation, we remain prolific when it comes to opportunities for the innovative investor. Conferencing and events are also cost effective for a UK company with a pan-African presence – regional meetings can be convened within world-class facilities in SA. Indeed, Cape Town has been voted best host city for events in Africa, an enticement all on its own. Should we not be approaching companies to market these conferencing capabilities, not just from the UK, but from other international markets?
In for a penny, in for a pound
As recently as last year, South Africa was named one of the most-affordable long-haul destinations in the UK’s annual Post Office report, which does a price comparison on various holiday elements across dozens of international destinations. The Pound Sterling makes for affordable luxury to visitors from the UK and, even if the Pound takes a knock following Brexit, SA will remain a global destination of choice. It’s likely that travel patterns would adapt in the event of a drop in value of the Pound, with visitors seeking tours and accommodation options that suit their finances. Potentially, this could have a slightly negative impact on the luxury tourism market, although the high-end luxury market would feel the effects of such a drop less than the middle-class travel market.
A drop in the value of the Pound may make travel within the Eurozone more of a challenge for UK travellers, so choosing those affordable long-haul destinations may even become more attractive. What has been noted with volatility in currencies, however, is that Britons have adopted a ‘wait-and-see’ attitude – they’re not making those travel decisions as quickly as previously, since, as we South Africans are aware, a change in the value of currency can have an impact on everything, from flight costs to how much is left to enjoy activities at the destination.
Look beyond Brexit
While Brexit may be central to the thoughts of potential travellers in the UK, it’s by no means the only factor that can influence travel: everything from political upheaval to natural disasters or unusual weather patterns can cause a shift in how and where people opt to travel. In order to ensure that international travel is encouraged, mechanics such as loyalty programmes, which provide tantalising benefits, can provide an enticement to international visitors.
As it stands, UK visitors can come to South Africa and enjoy affordable luxury. It’s our job, as locals in the hospitality industry, to ensure that all visitors continue to enjoy unparalleled visitor experiences.
Danny Bryer is Area Director of Sales, Marketing and Revenue Management at Protea Hotels by Marriott and African Pride, Autograph Collection Hotels.
This article was first published by TourismUpdate on the 30th January 2019.