The determinants of the international demand for tourism to South Africa
Globally, the tourism industry is recognised as one of the fastest growing industries, generating high revenues and creating a vast number of job opportunities. In South Africa, this is no different and, in recent years, the tourism industry has outshone the country's gold exports therefore claiming its position as the fourth highest earner of foreign exchange to date. Yet the industry is still to receive the attention it deserves from conventional economics. This research aimed to fill this gap in South Africa by providing an understanding on the determinants of international tourism demand for South Africa. The first objective of the study was to provide a broad overview of the tourism industry of South Africa. The discussion focused on the supply and demand sides of tourism which, in turn, are divided into the domestic and international tourism markets. There has been a high growth, especially in the international market since 1994 and, while domestic and international markets continue to grow, seasonality remains an issue. Tourism has a significant impact on economic activity, employment, and the balance of payments and therefore the industry has great potential. The second objective was to create a theoretical understanding on the different factors that could determine the international demand for the tourism product. From this discussion it was found that there are various economic and non-economic factors that are believed to have an influence on tourism demand. Income, prices, transport cost, and the exchange rate are amongst the favourite economic variables with travel time, population, marketing expenditure, climate, and capacity being the more popular non-economic factors. Among these, certain threats were also identified that could have harmful impacts on tourism growth. The third objective and main aim of the study was to determine which of the factors identified earlier determine the demand for international tourism to South Africa. This was done through an empirical investigation. Data from all the continents were used to attain an international perspective on tourist arrivals (tourism demand). The results indicated that capacity and climate factors determine tourism demand in the short term with income and transport cost influencing South Africa as a tourism destination in the long term. The last objective was to determine whether certain events or disasters that take place globally have a negative influence on tourism demand to South Africa. The event that was looked as was the terror attacks on the United States in September 2001. It was found that although the overall tourism activity of the world became stagnant during this period, the effect was not that considerable in South Africa's tourism arrivals. Tourism in countries such as the United Sates, on the other hand, has still not recovered fully after this event.