South Africa’s tourism sector has played a major role in improving the country’s GDP, with the South African Reserve Bank (SARB) reporting real GDP growth of 0.4% for the fourth quarter of 2025.
However, despite this growth, GDP has grown by less than 1% quarter-over-quarter since the COVID ‘bounce-back,’ and all indications suggest that it will remain muted for the foreseeable future.
In 2025, GDP growth reached 1.1%, marking the strongest performance since 2022. The SARB’s leading indicator suggests a positive outlook; however, significant growth acceleration is still not in sight.
According to consulting firm Eighty20, several structural constraints continue to impede growth, including electricity supply shortages, logistical challenges at Transnet, low fixed investment, labour-market issues, high public debt, and susceptibility to external shocks.
“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,” said Eighty20 director Andrew Fulton.
Fulton said that tourism is less reliant on the underperforming freight rail and port infrastructure. It generates foreign exchange without needing significant capital investments.
The sector is primarily driven by private operators rather than government planning. Tourism is labour-intensive, providing jobs for low- and mid-skilled workers who often do not require advanced degrees or, in some cases, even a high school diploma to be productive in the industry.
“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,” said Fulton.
“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.”
In 2024, international tourism spending on foreign exchange is estimated to be R114 billion. However, Fulton highlighted that domestic tourism has become the dominant force in the sector.
South Africans travelling within the country are expected to account for approximately R665 billion in spending, which represents over 85% of total tourism expenditure.
Domestic tourism outweighs international tourism
According to the MAPS dataset, which is a quarterly survey of 20,000 people conducted by MRF, 15.4 million South Africans travelled more than 100 km from their homes in the past year.
Of these, 12 million travelled for leisure purposes, with a significant concentration among specific groups identified in the Eighty20 National Segmentation: Middle Class Workers, Comfortable Retirees, and Heavy Hitters.
Additionally, Students and Scholars were also more likely to travel domestically. When it comes to international travel, Comfortable Retirees and Heavy Hitters were two to three times more likely to travel compared to other South Africans.
“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,” said Fulton.
South Africa welcomed 10.5 million of the 81 million visitors to Africa in 2025, exceeding pre-pandemic numbers for the first time.
The Western Cape consistently outperforms other provinces in various economic and governance metrics.
It has more than three times as many municipalities with clean audits, offers functional local governance, and has an unemployment rate significantly lower than several other provinces. Additionally, the region boasts a wealth of skilled citizens.
The province generates approximately 25% of South Africa’s international tourism revenue and attracts the largest share of overseas leisure visitors, along with business from Meetings, Incentives, Conferences, and Exhibitions (MICE).
According to projections from the World Travel & Tourism Council (WTTC), tourism could contribute 10.3% to South Africa’s GDP by 2035.
