Jeremy Maggs speaks to Andrew Fulton on Hot Business:  South Africa’s tourism rebound is helping support jobs and growth

South Africa’s GDP growth story is, in many ways, a story of constraints and structural bottlenecks that have kept the economy from realising its potential for years. Against that largely sobering backdrop, tourism stands out as a rare source of optimism: a sector nimble enough to work around the obstacles that have stalled so many others. Eighty20, South Africa’s leading consumer data consultancy, unpacks the numbers.

With pristine beaches, dramatic mountain ranges, world-renowned winelands, unique flora and fauna, South Africa is a high demand tourist destination – made all the more attractive by a competitive exchange rate.

“While residents (particularly in Cape Town) may voice concerns about congestion and rising rental costs, the economic case for tourism is difficult to dispute. More than 10% of all jobs in South Africa are linked to the sector in some way, and following the severe disruption of COVID-19, tourism has emerged as one of the fastest-recovering sectors of the economy,” says Eighty20.

This is significant given South Africa’s broader GDP situation. The most recent 2025 Q4 data shows quarter-on-quarter growth of 0.4%, the fifth consecutive quarter of expansion, however GDP has grown by less than 1% QoQ since the COVID ‘bounce-back’ and all indications are that it will remain muted for the foreseeable future. Full-year 2025 GDP growth came in at 1.1%, the strongest since 2022, and the SARB’s leading indicator is pointing in a positive direction, but meaningful acceleration remains elusive. Growth continues to be held back by well-documented structural constraints: electricity supply shortfalls, logistics failures at Transnet, weak fixed investment, labour market dysfunction, high public debt and vulnerability to external shocks.

Why is tourism different?

Tourism is notable precisely because it sidesteps most of these constraints. It is not energy-intensive, and accommodation and entertainment facilities can be supported by cost-effective backup power solutions. Tourism is less dependent on the freight rail and port infrastructure that continues to underperform. It generates foreign exchange without requiring large capital outlays. It is driven by private operators rather than government planning. And critically, it is labour-intensive, absorbing low- and mid-skilled workers who do not require advanced degrees, or sometimes even a matric certificate to participate productively in the sector.

❝ In 2024, tourism supported approximately 954,000 direct jobs, roughly 5.7% of total employment, and as many as 1.8–1.9 million jobs when indirect effects are included.

The employment figures reflect this. In 2024, tourism supported approximately 954,000 direct jobs, roughly 5.7% of total employment, and as many as 1.8–1.9 million jobs when indirect effects are included. These jobs are disproportionately concentrated among youth, women-owned businesses, and SMMEs in rural and township economies, making the sector a meaningful tool for addressing some of South Africa’s biggest social challenges.

On the foreign exchange side, international tourism spending reached an estimated R114 billion in 2024. However, it is worth noting that domestic tourism now dominates the sector, with South Africans travelling within the country accounting for an estimated R665 billion in spending, more than 85% of total tourism expenditure.

According to the MAPS dataset, a survey of 20,000 people released quarterly by the MRF, 15.4m South Africans travelled more than 100km from their homes in the past year. For 12m of them, the purpose of the travel was leisure, over-indexed for a few Eighty20 National Segmentation groups – the Middle Class Workers, the Comfortable Retirees and Heavy Hitters. Students and Scholars were also more likely to travel domestically. For international travel, the Comfortable Retirees and Heavy Hitters were two to three times more likely to travel than other South Africans.

Recovery and momentum

Tourism was decimated more than most industries during the pandemic. The discovery and reporting of the Omicron variant by South African scientists in late 2021 prompted widespread international travel bans, costing the country its second consecutive peak tourism season. Recovery has nonetheless been robust: South Africa attracted 10.5 million of the 81 million visitors to Africa in 2025, surpassing pre-pandemic levels for the first time.

The Western Cape’s Outsized Role

The Western Cape consistently outperforms other provinces across a range of economic and governance metrics (more than 3 times the number of municipalities with a clean audit, functional local government, half the unemployment rate of some other provinces and a plethora of skilled citizens), and tourism is no exception. The province accounts for approximately 25% of South Africa’s international tourism revenue and attracts the largest share of overseas leisure visitors, as well as Meetings, Incentives, Conferences, and Exhibitions (MICE) business.

MICE tourism is particularly valuable. It generates higher spend per visitor than leisure travel, operates year-round, reducing the seasonal peaks and troughs that affect the broader sector and fills hotels during off-peak periods. It supports premium accommodation, skilled employment in events and logistics, and has strong spillover effects as delegates extend their trips for leisure purposes. Further, thousands of businesses in Cape Town are direct beneficiaries of activity at the CTICC or other venues.

The Road Ahead

According to World Travel & Tourism Council (WTTC) projections, tourism could contribute 10.3% of South Africa’s GDP by 2035, support 2.6 million jobs, and add R912 billion annually to the economy. For a country searching for growth engines that work within its existing constraints, few sectors offer a more credible path forward.

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