Travel Demand Bulletin: Domestic travel driving South Africa’s rebound?

After two years of turmoil, South Africa’s travel industry is looking to bounce back. But, with economic uncertainty looming in many of its traditional source markets, is this affecting its recovery?

The removal of all pandemic restrictions in June, including any testing and vaccination requirements for travellers, provides welcome relief and a much needed tonic to the South African tourism industry following 26 months of restrictions. 

For hoteliers looking to maintain their competitive advantage, navigating this dynamic hospitality landscape has become increasingly complex. Using data from OTA Insight’s free Global Market Insight tool, as well as forward-looking data from Market Insight, which maps booking intent, we can see new trends begin to emerge. 

By visualising flight and hotel search data from around the world hoteliers have a better understanding of who is looking, for what dates, and for how long.

With this information, they can ensure that they are targeting the right audience with the right offers, and ensure that when they convert their bookings, they are converting at the optimum price.

Cape Town - Hotel searches dominated by domestic demand

Recent flight search data indicates that there are 2.55 times more flight searches to Cape Town in July than there were at the beginning of the year. Compared to the same period in 2021, we can see that flight searches to Cape Town are currently 5.77 times higher than they were. 

Hotel searches, however, are 12% lower than they were in January, but even they are 1.7 times higher than the same period in 2021, indicating that customers are not just browsing flights, but also looking to book.

Flight Search Evolution Index Cape Town and Johannesburg

Flight search data shows that 27% of those searching for flights to Johannesburg are from the UK, 13% are from Germany, 6% are from within SA, 6% are from the Netherlands and 5% are from Italy. And, 37.4% of customers are searching for lengths-of-stay between 4 and 7 days, while 49.6%of customers are searching for lengths-of-stay between 8-14 days.

On the other hand, 60% of hotel searches originate from SA, and just 8% are from the UK, indicating that domestic demand remains the country’s biggest source of potential travellers. 5% of current hotel searches are from the USA, while 4% are from Germany, and 2% from the Netherlands. 

In addition, more than half of all flight and hotel searches are for dates more than 3 months away - where demand for November and December looks to be high. However, hotel searches for dates in the 29-90 day window are currently trending upwards, and make up 27% of all hotel searches. Searches for dates in the 8 - 28 day window are also increasing.

Pricing data indicates that current hotel prices in Cape town are at a similar level to what they were in 2019. However, the average actualised prices so far in 2022 are 9.69% lower than they were in 2019.

In May 2022, prices were 9% higher than May 2019, and they currently sit 2.19% higher than in July 2019. For the remainder of the year, the average advertised prices are 1.4% higher than they were in 2019.

Pricing Recovery - Cape Town (ZAR)

Johannesburg - Hotel prices slow to recover

There have been 2.24 times as many flight searches to Johannesburg as there were at the start of 2022. And compared to the same time last year, flight searches to Johannesburg are 8 times higher than they were in July 2021. While hotel searches are 2.8 times higher than they were in July 2021, they are currently 20% lower than there were in March 2022.

Hotel Search Evolution Index Cape Town and Johannesburg

While 70% of all flight searches to Johannesburg are from Europe, 75% of all people searching for hotels in Johannesburg are from Africa. Just 14% are from Europe.

Those searching for flights to Johannesburg are also searching for travel dates further away, 43% are for dates more than 90 days away, and 32% are searching for flight dates between 29 and 90 days ahead. 29.1% of flight searches to Johannesburg are from the UK, 5.2% from SA, 4.9% from Italy, 4.9% from Italy, 4.5% from the Netherlands. 

Flight search data also indicate that 50.5% of those looking to fly to Johannesburg are looking to stay for between 8 and 14 days, while 36.7% are for stays of 4-7 days.

Hotel search data indicates an even distribution of booking lead times. 29% of all hotel searches are for travel dates in the next 28 days, 29% in the 29-90 day window, 28% for more than 90 days away, and 15% for dates in the next 7 days. 

South Africans make up 67% of all those searching for hotels in Johannesburg - just 5.6% are from the UK, and 4.9% are from the USA. South African bookers are looking to stay an average of 3.4 nights per hotel, while those from the UK are looking to stay longer - 6.4 nights.

Those from the US, however,  are looking for an average of 2.5 nights. In general, 50.8% of searchers were looking for just one night, 27.7% for 2 nights, and 10.3% for 3 nights.

OTA/Hotel Metasearch Leadtime Evolution - Johannesburg

Actualised 2022 hotel prices in Johannesburg are 26.74% lower than 2019, and 27% below 2020 prices. They are, on average, 9% higher than 2021. In the premium space, 5 star hotel prices are averaging just 4.37% lower in 2022 than they were in 2019, and from the beginning of July, 5 star prices have crept above 2019 prices. 

However, the forward-looking outlook indicates that advertised hotel prices will remain on average 35% below actualised 2019 levels. That being said, 2022 advertised prices are 10% above last year’s prices - an indication that demand and growth are in progress.

Pricing Recovery - Johannesburg (ZAR)

Summary

It’s clear by looking at the data, both historic and forward looking, that the recovery has begun for South African hoteliers. Hotel prices have not yet recovered to where they were in 2019 though, like many other destinations in Europe, and are also unlikely to do so in 2022. 

Domestic and regional demand still make up the majority of hotel searches and hoteliers should focus their strategy on capitalising on this demand. Despite signs of interest from traditional international source markets, it is clear that there is still a lot of opportunity for growth. And, as booking lead-times, and consumers’ length-of-stay needs continue to evolve, hoteliers have an opportunity to leverage forward-looking travel demand data to optimise their commercial strategies.

Only by having the right real-time historical, current and future-looking data at their fingertips can South African hoteliers visualise these new revenue opportunities.