SA’s Tourism Paradox: More International Visitors, But They’re Not Spending Much

South Africa’s international tourist arrivals are climbing, but there’s a quiet concern stirring in the local tourism industry: while more people are visiting, they’re not exactly splurging once they get here.

At the recent Hotel & Hospitality Expo Africa in Cape Town, tourism experts unpacked this growing gap between headcounts and how much money international travellers are actually spending per day — and it’s got the industry thinking hard about the country’s pricing strategy and premium appeal.

More Tourists, But Modest Wallets

According to Jacques Stoltz, Director of Tourism for the Western Cape’s Department of Economic Development and Tourism, South Africa is underperforming when it comes to tourist spend, particularly in US dollar terms.

“It’s not just about how many people are coming,” Stoltz said. “It’s about the value we’re getting from each visit. We’re not keeping up with global benchmarks when it comes to spend per traveller.”

While overall tourism revenue is on the rise — thanks in part to more arrivals and increased room rates — per capita spend remains sluggish. Industry leaders argue that this is a missed opportunity, especially given South Africa’s diverse offerings, from Big Five safaris to wine country retreats and heritage-rich cities.

What Are Tourists Spending And What Aren’t They?

The City of Cape Town has a goal: get daily spend by international visitors up from R1 200 (€58) to at least R1 606 (€78) per day. But current averages, depending on the type of traveller, are falling short.

Wildlife tourists, for instance, reportedly spend around R1 700 (€82) per day, according to SA Tourism. But that’s an outlier. The broader average hovers around just R840 (€41) per day — and that includes local tourists, who typically spend less.

The difference is even more stark when comparing to East Africa. Mike Vroom of the Hemingways Collection highlighted how the same bottle of wine that costs R250 in South Africa sells for ten times more in Rwanda. “The market is prepared to pay it,” he said. “It comes down to perception and positioning.”

Pricing Pain or Perception Problem?

The big question for many in the industry: should South Africa raise its prices to match international expectations? Or is the real issue a lack of high-end experiences that international visitors are willing to spend big on?

Lee-Anne Singer, Chair of FEDHASA Cape, summed up the dilemma. “There’s a tension between being an affordable, liveable city for locals, and still being attractive to high-spending tourists. How do we balance both?”

In Cape Town and Johannesburg alike, there’s growing concern that luxury travel experiences aren’t being packaged and marketed with enough confidence — or margin. There’s also a risk of pricing out local residents, who are already feeling the pinch.

Revenue Is Rising, But Not Everywhere

Tourism Business Council of South Africa (TBCSA) CEO Tshifhiwa Tshivhengwa confirmed that revenue is, in fact, growing. The latest figures show a 9% increase this year, excluding food and drink sales.

But not all provinces are sharing in the boom. The Western Cape is benefitting most, thanks to its international appeal, while Gauteng sees strength in business travel, events and local government movement. Other provinces continue to lag behind.

What Needs to Change?

South Africa’s appeal as a bucket-list destination is solid, but the industry now faces a bigger challenge: how to extract more value per visitor without losing its local charm or pricing itself out of the global market.

This may mean rethinking how premium experiences are packaged, investing in high-end attractions, and better targeting international markets that are prepared to spend more. But it also means having difficult conversations about pricing and inclusivity.

Because if tourists are coming in bigger numbers but walking away with change in their pockets, we may be selling ourselves short.

Source:Tourism Update 

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