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Early signs are starting to appear that the number of affluent foreign tourists set to visit South
African shores this summer will be significantly higher than last year, as the worst of the global
recession appears to be easing for the some of the world’s biggest economies.
Recent reports in the American press have suggested the green shoots of recovery are already making an appearance for most affluent luxury consumers, raising expectations that tourism hotspots such as Cape Town will benefit from the upswing.
A recent survey by US-based Unity Marketing that tracks luxury spending power in America found that
48% of respondents believed their personal financial situation would improve over the next 12 months,
the highest level recorded in the index for nearly two years.
In addition, sales reports from some of the world's biggest luxury brands indicate that luxury
spending power is on the up again after both Cartier and Tiffany's announced an improvement in sales.
"News that wealthy western consumers are starting to spend again is a positive sign for South Africa's luxury tourism industry, as foreign visitors make up a significant proportion of overall revenue at
this end of the market," says David Solomon.
Solomon says that the renewed interest from the West is also being mirrored by wealthy tourists from
the East, as a sharp rise in wealth among millions of individuals in both India and China has led to a lucrative emerging market of luxury business and leisure travelers from these two countries.
The Unity Marketing survey also found that while confidence of personal finances had improved, the
attitudes of affluent US consumers had evolved to a more value-conscious mindset, a change that is
expected to outlast the economic downturn.
"This is consistent with the feedback we have been receiving from foreign travel agencies, who say
that while the number of wealthier Americans and Europeans booking foreign holidays is on the
increase, they are placing a much greater emphasis on value for money.
This change in emphasis should be of concern to the local industry, given the findings of a recent
visitor satisfaction survey commissioned by Cape Town Tourism, that only 15% of the 323 respondents
surveyed believed that South Africa offered 'value for money'.
"We need to be extremely careful of falling into the trap of thinking that wealthy foreign visitors
are completely price insensitive," says Solomon. "A number of other international destinations have
learned the hard way that there is just too much competition from other locations to charge exorbitant prices. You are dealing with extremely savvy consumers and overcharging is simply not sustainable in
the long run."
Solomon adds that operators must also be careful not to use the World Cup as a means of overcharging.
"2010 provides us with a unique opportunity, but we should see it as a means of showcasing our country with the aim of attracting future tourism, not as a once off opportunity to empty foreign wallets
during the four week competition."
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