Tag Archives: petrol price

Interest rate cut welcomed

The 1 % cut in the interest rate, down to 14 %, is widely welcomed, and should be excellent news for the tourism industry.   

The announcement by Reserve Bank Governor Tito Mboweni yesterday was accompanied by a warning to local politicians about the global credit crunch, and the effect that it could have on South Africa.   “We are going to go through a rough patch over the next three or four years”, he said, reports Business Report.  He did not foresee a recession for South Africa, but described the recent World Economic Forum as “a memorial service for the world economy”!

Mboweni wanted to cut the rate by 2 percentage points, he said, but stated that his committee had urged him to take a more cautious approach to the interest rate cut.  A further 1 % cut in April appears likely.

The interest rate cut good news should offset the disappointing increase by 61 cents per litre in the price of petrol earlier this week.

Petrol price rise bad for tourism

It is a shame that the price of petrol should rise by 61 cents today, given the steady decline that motorists became used to since late last year.   The new price is R 6,38 per litre at the coast.

An already depressed tourism industry in the country areas thrives on a reasonable petrol price.   However, a tank of petrol should cost just under R 400.

The anticipated decrease in the interest rate next week, by 1 percentage point it is hoped, is eagerly awaited by South African consumers, as retrenchments and the global credit crunch take their toll at all levels.

Mixed festive season feedback

In the past two days newspapers have been quoting from a Cape Town Routes Unlimited media release about the status of the festive season, creating a confusing picture as to whether the season has been a good or bad one.

What is surprising is that the festive season is not yet over, and already Cape Town Routes Unlimited (CTRU) is trying to draw comparisons between this season and that of last year, before it has come to an end, with many visitors only returning to start work on Monday 12 January.

The Cape Times report quotes CTRU as stating:”…they (Tourism Managers) had experienced a festive season that was “similar or better” than those in previous years”    However, the article does not state which Managers CTRU refers to.   Further reference is made to tourism having improved on the West Coast, the Winelands, and Central Karoo, with a decline in the Garden Route, Klein Karroo and Robertson and Montagu, two towns which were affected by floods in November.   The basis of the trend information is not specified.   Surprisingly, no mention is made of Cape Town’s festive season success, which has been exceptional and continues until the end of this week.

The Cape Times artcle also states that the Airports Company serviced more passengers in December 2008 compared to a year ago.   This trend was also experienced by the V & A Waterfront, and in Kirstenbosch, while the Table Mountain Aerial Cableway Company had its worst performance in 10 years in December, due to the weather.

Business Report quotes FEDHASA CEO Brett Dungan as saying that “tourists were spending less, but Cape Town and Durban were still busy”.  One wonders where he sourced his information, and how it is quantified, as the FEDHASA Cape office is still closed, and the FEDHASA offices in KwaZulu-Natal having stated that the area had experienced a very poor season a week ago, according to media reports.

The future looks good, with February predicted to be an excellent tourism month.   Whale Cottage Camps Bay, for example, already has an occupancy of 90 % for February, more than three weeks before the start of the month.  This used to be the case in November too, but the booking pattern was extremely last minute in November 2008, yet resulted in the same occupancy rate as in the year before.

Rented cars were hard to find over the festive season.  One of the most popular companies, Value Car Hire, had no stock over the New Year, with availability from this week onwards for the first time.

The decrease in the price of petrol yesterday, by more than R 1,30 a litre, is an excellent note on which to start 2009, which many say will be a challenging one, due to the global credit crunch.

Petrol price drop greater than estimated

The drop in the price of petrol by R 1,35 per litre at midnight is most welcome for the tourism industry, bringing the new price of petrol at the coast to R 5,76 per litre, the same price as in March 2007!   The decrease in the petrol price is larger than was estimated last week.

The price of diesel has dropped by R 1,68 per litre, to R 6, 39 per litre.

The drop in the price of petrol and diesel will have a positive effect on tourism, and should make itself felt in an increase in tourism to the Garden Route and country towns and villages, as well as in a decrease in food prices, which should reduce the rate of inflation, which should bring about a cut in the interest rate in February.   This is welcome news for cash-strapped South Africans, who probably over-extended themselves over the festive season.