WHY is SA’s tourism industry in the doldrums? Sun International CEO David Coutts-Trotter says hotel bookings are down for a third year — a year characterised by oversupply and poor demand. He doesn’t expect occupancy rates to improve soon.

It’s certainly true that the classier hotels are having a hard time of it. The Grace, once upon a time an iconic landmark in the Johannesburg suburb of Rosebank, has closed its doors. At the end of this year the Sun Hotel on Grayston Drive will shut up shop. I understand the property is to be redeveloped, probably as office accommodation.

The statistics indicated that we played host to more than 8-million tourists last year, 1-million more than in 2009. Tourism’s contribution to the economy in 2009 is estimated to have been nearly R190bn. And, let’s acknowledge it, tourism is one of the sectors highlighted as among those likeliest to assist in job creation.

Given that this is the case, some one needs to explain why the marketing budget for tourism was increased by only R60m. It is plain this is grossly inadequate for a truly effective campaign to attract large numbers of foreigners.

What we now know about travel, bed occupancy rates and discretionary spending domestically so far this year is that increasing numbers of businessmen are using "red eye" flights to eliminate stopovers. They are downgrading from five-star hotels to four- and even three-star accommodation. Discretionary spending has dropped in the private sector, as it always does when there’s a slump in evidence or one threatening (and yes, it does indeed appear ominously close).

Tourism Minister Marthinus van Schalkwyk says 70% of South African tourism is domestic in origin. It follows, therefore, that in current circumstances local hotels and bed ’n breakfasts must present far more attractive "deals" if South Africans are to be lured out of their dens.

According to Michael Tatalias, CEO of the Southern African Tourism Services Association, a much tighter control of available money by heads of families has translated into cancellations of those two-week long holidays, to be replaced by long weekends. He adds the imposition of tolls on SA’s national roads will have a huge effect on travel decisions.

Did you know that among many American families it is the 12- and 13- year-olds who read the National Geographic and then demand to go on safari? In many cases, however, that doesn’t happen because so many luxury tourist lodges don’t accept children of that age.

The aversion to a variety of individual national cultures comes through in the inability to cater adequately for specific needs. Tatalias says many Indian visitors are vegetarian and the cuisine offered in SA hotels fails to cater for this. In addition, some cultures like travelling in large family groups, as many as 10 or more, but SA’s game lodges are too expensive and discourage children.

Hotel owners and managers are struggling with a range of difficulties, notable among them the way in which labour costs have increased out of all proportion. In addition, the problems associated with irregular power supplies have meant hotels are required to install expensive generating capacity and must meet the substantial increases Eskom is now levying. On top of these comes rising municipal rates alongside a monthly payment of as much as up to R1000 per room per month.

Of course, the good times will come again. The best bet so far is that 2013 will be the first year of genuine recovery in the industry. Between now and then, many hostelries are likely to disappear. And, when 2013 comes around, those still operating will certainly want to recoup the damage of three years of slump.