Sat Oct 22 23:46:38 SAST 2016

Few can afford overseas tours

By unknown | Oct 17, 2008 | COMMENTS [ 0 ]

Siya Miti, Lihle Z Mtshali

Siya Miti, Lihle Z Mtshali

South Africans already walking the debt tightrope will have to dig deeper to travel overseas because of the weaker rand, but on the flip side at current levels the weakened currency is expected to boost local travel.

William Puk, a director at Travel Counsellors in Johannesburg, said: "What we have experienced in the last 48 hours will definitely have a huge impact on leisure travels internationally as people would resort to local travelling to work within the parameters of the rand.

"Looking at the other side of it, it will boost the local tourism industry."

The rand shocked investors on Wednesday night when it succumbed to global turmoil and recession fears, slumping to a more than six-year worst level of R10,8615 against the US dollar.

It showed signs of recovery in early trade yesterday, firming to an intraday best level of R9,79 to the dollar.

By late yesterday it was on the back foot again as Wall Street stocks dipped.

"The weaker rand is making it difficult for South Africans to travel overseas.

"We're noting the leisure market has dropped, a lot of people are calling in for quotes, but are not converting those into solid bookings," said Tammy Krause, a senior travel consultant at Rennies Travel.

She added that the general rise in the cost of living over the better part of this year has also had a negative impact on travel.

"As soon as prices for consumer goods go up, leisure spending is one of the first things consumers cut back on. That's not something we expect to be ratified soon."

"It's not just South Africans, Americans are also finding it difficult to travel. Trafalgar runs tours between Europe and America.

" This year for the first time in about 10 years four of the guaranteed tours were cancelled, whereas guaranteed tours always go ahead.

"We've also had to cancel tours for our clients booked on those tours," said Krause.

The depreciating rand is having a negative impact on South Africa's inflationary outlook, economists said yesterday, which might force the South African Reserve Bank to hike interest rates - rather than cut as has been expected - if the currency remains at current levels.

"Technically, the Bank must hike interest rates if they want to stem the rand's weakness and entice investors to keep their investments in the country," said Danelee van Dyk, a Standard Bank economist. - With Kea' Modimoeng, Zweli Mokgata and Sapa


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