Education and Tourism Correspondent

SOUTH African hotels are struggling to reach the levels attained in last year's bumper tourism season as the rand's rally in recent months to levels below R7 to the dollar threatens to end the country's tourism boom.

The knock-on effect of the rand's strength has resulted in a 2% drop in hotel occupancies for the year to September compared with the same period last year, according to the Deloitte & Touche HotelBenchMark survey.

The survey comes a day after Tourvest, SA's largest tourism group, issued a profit warning, signalling that the sector was slowing down as the rand's climb meant that foreign tourists could buy less for their currency than a year ago.

The survey showed that Pretoria had seen the largest decline of 6,5% among the big cities, while Durban reported a 3,3% drop followed by Johannesburg at 2,6%.

Interestingly, Cape Town had shown resilience, with occupancies remaining relatively constant compared with last year. This could be due partly to the opening of the Cape Town Convention Centre in June this year.

Apart from a brief respite in May, the survey indicated that occupancy figures since April had consistently underperformed each month compared to last year.

Deloitte & Touche partner Rob O'Hanlon blamed the drop on the rand's "consequential impact" on the cost of South African travel to foreigners.

He also attributed it to the continuing weakness of both the US and major European economies, and the once-off nature of global events in SA such as the last year's World Summit on Sustainable Development and the Cricket World Cup.

However, SA Tourism's CE Cheryl Carolus maintained yesterday that the rand's strength in recent months had not affected SA's reputation as a "competitive, valuefor-money tourism destination".

"SA has never been perceived as a cheap destination. Of concern is that the volatility of the currency will impact SA's competitive advantage and the ability to negotiate long-term pricing strategies."

Oct 29 2003 07:01:54:000AM Sharda Naidoo Business Day 1st Edition