IT’S a bleak outlook for long-haul
travel, as the weak rand and
poor economy impact heavily
on demand, say travel industry
representatives canvassed by TNW
last week.
Long-haul leisure bookings are
down, says Beachcomber Tours
md, Terry Munro. “We are trying
to mitigate the impact on our
business by keeping costs down
and offering special deals and
good discounts.” Travel Vision
gm, Marelize le Roux, agrees that
times are tough, making it difficult
for tour operators to plan ahead.
“We cannot even plan month to
month any more. We plan week by
week.”
Air Mauritius regional manager
Southern Africa and Latin America,
Carla da Silva, reports that there
are price-focused promotions to
stimulate demand in response to
late booking trends, price-sensitive
corporates and leisure travellers
looking for off-peak specials.
Meanwhile, local airlines are
hit on two fronts, says Kirby
Gordon, FlySafair head of sales
and distribution. “Our costs go up
because many are dollar-based,
such as aircraft leases and
spares, as is the price of oil, and
demand drops as a result of the
poor economy.”
He says Acsa statistics show
that domestic airline load factors
are down each month compared
with last year, by three to six
percentage points, even though
5% more people are actually
moving through the airports on
domestic flights. This, he says,
is because FlySafair increased
capacity on its routes by 9%,
partly absorbing competitors’
losses. “We believe the key now
is to review costs in order to
keep fares as low as possible to
stimulate demand.”
Flight Centre md, Andrew
Stark, believes South African
leisure travellers will switch to
destinations closer to home to
stretch their hard-earned rands;
opt for all-inclusive packages
and cruising; and shorten their
stays. “South Africans are very
resilient and will always find
disposable income to still travel.
Well-priced and innovatively
packaged holidays will continue
to sell. In times like these South
Africans ought to explore their
own country.”
Corporate overseas travel
appears less vulnerable to the
volatile rand but is still hard hit
by the slumping economy, says
eTravel ceo, Garth Wolff. “If a
corporate needs to do
business overseas, they
go, irrespective of the
rand. However, negative
sentiment towards South
Africa due to Eskom’s
debt and land uncertainty
affects investment
confidence and corporate
profits, which means fewer
jobs, less growth, less
travel.” This, he adds, is
exacerbated by market
instability in China, the US
and UK. “There are global
fears of a recession in
the US and less growth
in China. Both are pulling
their funds away from
emerging markets back
into their own markets,
hence emerging market
currencies are weakening.”
Travel Counsellors SA gm,
Mladen Lukic, says: “We
haven’t seen any significant
reduction in outbound
corporate travel, but the
volatility of the rand makes
it difficult to manage
the budget for corporate
travellers.” He says
pressure on the corporate
market increasingly sees
airlines restructuring
their cabins, resulting in
first class having all but
disappeared in this region.
However, this
“downgrading behaviour”
is positive for low-cost
carriers, says Kirby.
“People still need to travel,
but they substitute lowcost for business class as
budgets get thinner.”
