South Africa’s Tourism Industry Coping with Worsening Electricity Outage Crisis
South Africa’s tourism industry, worth $27.4 billion pre-Covid, is struggling to recover due to ongoing electricity outages that cost the economy at least $54 million per day. To cope with the crisis, some hospitality and tourism businesses are investing in costly diesel generators or turning to renewable energy sources, while others are partnering with companies such as Airbnb to attract digital nomads who could provide a significant boost to the economy.
South Africa has been facing an escalating electricity crisis with regular blackouts occurring since 2007, which are now a daily occurrence. This persistent energy crisis has cost the economy at least $54 million per day in 2022, with the hospitality and tourism industries forced to seek alternative sources of energy and adapt to ensure an uninterrupted guest experience, says Minister Gwede Mantashe.
Tourist arrival numbers in 2022 increased by 153% compared to 2021, with 5.7 million visitors to the country, yet it remains 44% below pre-Covid levels of 10.23 million visitors in 2019.
Investing in renewable energy, such as solar systems, is seen as a way to decrease energy consumption and take more load off the national energy grid. For instance, V&A Waterfront, South Africa’s most visited attraction, invested $2 million in solar systems, leading to a 35% decrease in overall energy consumption.
The power cuts have directly impacted digital nomads, which make up at least 80% of Curiocity’s bookings, who are on a “workcation.” They tend to stay for an average of 15 days and are the first adopters post-pandemic. Load shedding affects this group, and their work is compromised, which could lead to shorter stays. Curiosity founder and CEO, Bheki Dube, has applied for the national department of tourism’s green tourism incentive fund to move the company to total solar and energy efficiency.
South Africa’s Tourism push for digital nomads has been impacted by the ongoing power cuts. Cape Town is promoting its digital nomad visa status through its partnership with Airbnb’s ‘live and work anywhere initiative.’ Each digital nomad tends to spend up to $2,800 during their stay, making them a significant benefit to the economy.
According to James Vos, City of Cape Town mayoral committee member for economic growth, “One report of an incentive program in Oklahoma in the USA shows digital nomads generated nearly $20 million in additional local gross domestic product. A special visa can help South Africa realize such gains.”
