Increase in South Africa’s Tourism Competitiveness – 23rd May 2024

By Dr Roelof Botha, Economic Advisor to the Optimum Group

On 21 May, the World Economic Forum (WEF) published the 2024 edition of the Travel & Tourism Development Index (TTDI), which benchmarks and measures the sets of factors and policies that enable the sustainable and resilient development of the Travel & Tourism (T&T) sector.

It is no surprise that the WEF has identified the T&T sector as one that merits substantial and ongoing research, as it represented more than 10% of global GDP and employment prior to the COVID-19 pandemic. Predictably the industry took a hefty knock during and immediately after the lockdown regulations that were imposed by governments during the pandemic but it has recovered well in recent years.

Last year, the T&T sector accounted for 9.1% of global GDP – an increase of more than 23% over the figure for 2022. One of the aims of the WEF’s research on the sector is to assist businesses and public sector policymakers in designing policies for the further development of this key economic sector.

The TDDI allows for cross-country comparisons and, by benchmarking progress on the drivers of T&T development, the index informs policies and investment decisions related to the development of T&T businesses and the sector as a whole.

The index is comprised of five dimensions, 17 pillars and 102 individual indicators, distributed among the different pillars. Final index scores are computed through aggregating indicator scores. They are rated on a common scale of 1 to 7, with 1 being the worst and 7 being the best outcome. The best overall score for 2024 was attained by the US (5.24), with only five other countries managing a score of above 5 (Spain, Japan, France, Germany, and Australia).

Between the 2022 and the 2024 indices, South Africa has fared exceptionally well, climbing seven places in the overall country rankings. Only six countries managed to record a larger jump in the rankings table, namely Brazil, Turkey, Indonesia, Saudi Arabia, Albania, and Uzbekistan.

South Africa has retained its number one position on the African continent. Four other member states of the Southern African Development Community (SADC) also achieved the top-ten rankings for Africa.

Exhibit 1 depicts the top-ranked African countries (expressed as a percentage of the top global score by the US of 5.24).

Exhibit 1 | The 2024 Travel & Tourism Development Index – Top-ten ranked countries in Africa

ToThePoint Exhibit 1 22 May

Source: World Economic Forum. Data released 21 May 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.

Exhibit 2 lists South Africa’s scores (out of a maximum of 7) for key selected pillars. The country’s strengths and weaknesses in these areas could be helpful for businesses operating in the T&T sector as well as relevant government agencies in efforts to encourage the further development of the tourism industry.

Exhibit 2 | South Africa’s scores for selected pillars of the Travel & Tourism Development Index

ToThePoint Exhibit 2 22 May

Source: World Economic Forum. Data released 21 May 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.

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Author: Dr. Roelof Botha

Economic Advisor of the Optimum Investment Group. He navigates complex topics with clarity and optimism and with more than 40 years of experience, including  Finmedia Economist of the Year winner and Advisor at National Treasury, offers insightful perspectives on South Africa’s economic and political landscape.