South Africa's tourism a bright spot despite recession

[July 28, 2017]   By Wendell Roelf

CAPE TOWN (Reuters) - South Africa's top tourist hub Cape Town expects a 13 percent jump in tourist arrivals this year to 1.77 million, officials said on Thursday, a rare bright spot in an economy that slid into recession in March.

Cape Town had the country's four most popular attractions, including Robben Island -- apartheid's most notorious jail where former president Nelson Mandela spent 18 years.

South Africa' economy is in dire need of some positive news.

It fell into recession in the first quarter of the year and is seen in Reuters polls growing just 0.7 percent for 2017 as a whole. Unemployment is at a 14-year high of 27.7 percent.

The country's credit rating, meanwhile, has been downgraded to junk by two of the top three credit rating agencies.

But tourists have been coming, possibly encouraged by the weak rand. It has fallen more than 20 percent against the dollar since a high last year.

Britain, Germany and the United States were the three leading sources of tourist arrivals to the Western Cape province, Alan Winde, regional minister of economic opportunities in the Western Cape province, said.

"Tourism can help South Africa to course correct its current economic trajectory," he told reporters.

Arrivals to Cape Town reached 1.56 million in 2016 from 1.38 million in 2014, with foreign spending rising by 3.6 billion rand to 18 billion rand ($1.4 billion) over the same period, Winde said.

According to South African Tourism, some 10 million foreigners overall arrived last year.

Tourists numbers to the Western Cape, which was the country's best performing region in terms of paid bed nights and first time visitors, have recovered from 1.32 million in 2015 when strict new visa rules were implemented. The rules have since been lifted and flights were also increased as tourism rebounded.

The Treasury said in February that tourism contributed 3 percent to GDP in 2015, and 711,746 people or 4.5 percent of the total workforce was employed in the sector.

"We believe that the tourism sector, which is not rand hedged, has the potential to pull us out of recession and to save and grow jobs," Winde said.

(Reporting by Wendell Roelf; Editing by James Macharia/Jeremy Gaunt)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.