While South Africa’s hospitality sector has seen a post-Covid rebound from a low base, both hotels and restaurants still haven’t seen a full return to normal.

In the second quarter, activity expanded strongly in the hospitality sector for the third quarter in a row, albeit at a slightly slower pace compared to the first quarter, the Bureau for Economic Research (BER) said in a research note on Monday (27 June).

The very high year-on-year growth rates for activity are due to the low levels of a year ago when few people went out to eat or travel due to Covid-19 fears and restrictions, the group said.

Despite the strong bounceback, the actual data from Stats SA for 2022Q1 showed that hotel room occupation and the real income of restaurants were still 35% below pre-pandemic levels.

“Beyond the first quarter, sharply rising menu prices and renewed pressure on local household budgets are also probably dampening the frequency of people’s visits to and spending at restaurants,” the BER said. “Load shedding could also be a contributory factor in the reluctance to go out eating in the evening,” the group said.

Activity in the transport sector also weakened considerably in the second quarter, the BER said.

“The temporary closure of the Durban port and the ongoing outage at Toyota’s plant in KwaZulu-Natal due to flooding, as well as a drop-off in mining and manufacturing activity, hit freight transport.

“The lack of international tour groups continued to suppress passenger road transport. While road freight transport was above pre-pandemic levels according to the actual data from Stats SA for the first quarter, road passenger transport was still only at 61%.”

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