SA tourism sector looks to bounce back after UK red delist announcement

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South African travellers will from Monday, October 11, be eligible for quarantine-free travel to the UK. Picture: iStock
South African travellers will from Monday, October 11, be eligible for quarantine-free travel to the UK. Picture: iStock

BUSINESS


South Africa is set to be removed from the UK’s red list, which banned almost all travel between the two countries. Analysts say the move is expected to bring a significant boost to the country’s tourism industry, which has been battered by the Covid-19 pandemic.

South Africa is eligible for quarantine-free travel to the UK with effect from Monday, UK Transport Secretary Grant Shapps announced.

On Thursday, the UK scrapped tough Covid-19 quarantine travel rules for 47 destinations. The move followed months of lobbying by the South African government and private sector, including a call from President Cyril Ramaphosa to UK Prime Minister Boris Johnson.

Shapps said: “With half-term and winter sun around the corner, we’re making it easier for families and loved ones to reunite by significantly cutting the number of destinations on the red list, thanks in part to the increased vaccination efforts around the globe.”

Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of SA told journalists that the UK’s red list decision was a complete disaster for the country.

READ: SA's economy is growing; yet, more people are losing their jobs

Speaking at a webinar hosted by the Free Market Foundation, Tshivhengwa said the local tourism industry had already lost 470 000 jobs due to the lockdown.

He said at the time:

We could get 100 000 people back at work if we reopen the UK market.

Tshivhengwa also said the UK had traditionally been South Africa’s biggest source of international tourists, and that the local economy lost an estimated R720 million per month – about R181 million a week – while the country was on the red list.

Many hotel group share prices on the stock exchange saw positive movement following Shapps announcement, Tshivhengwa said.

The South African tourism sector is without a doubt one of the industries that was hardest hit by the pandemic. The latest available data suggests that the shock to the industry resulted in severe revenue losses, including domestic and international business closures, massive job losses, the collapse of supply and demand on the domestic and international markets, as well as persistent pressure on the South African tourism brand due the country’s association with new variants of the Covid-19 virus.

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In a closed presentation to the ANC in September, about the state of South Africa’s economy, Finance Minister Enoch Godongwana said the domestic tourism sector had been most detrimentally affected by the pandemic and it may take years for this important labour-intensive sector to recover.

City Press has seen the presentation made to members of the ANC national executive committee. In it, the minister said that foreign travel receipts plummeted markedly to R19.6 billion by the first quarter of 2021, and well below R120 billion in quarter one of 2020.

He warned that further waves of Covid-19 infections globally and domestically, and the accompanying travel restrictions, alongside a general reluctance of individuals to travel at this stage, could further delay the recovery of the sector.

“Despite some improvement as certain travel restrictions were lifted both globally and domestically late in 2020 and early in 2021, the number of foreign tourist arrivals in South Africa is currently only a small fraction of pre-pandemic levels, while occupancy rates remain very low for the industry at large,” said Godongwana.


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The Bureau for Economic Research (BER) released its latest tourism note on the pandemic and the country’s tourism sector in September.

BER economist Mia Slabber said South Africa received 10.2 million international overnight visitors in 2019, dropping sharply to 3.2 million in 2020 – “almost 70% fewer than in 2019”.

Compared with 2019, day trips and overnight trips in South Africa were down 54% and 40%, respectively, in 2020.

Slabber said:

So far this year, day trips are still 43.1% below 2019 levels and overnight trips are 25% down.

She said that due to the tourism industry’s linkages to the rest of the economy, the sector’s contribution to GDP shrank from 7.2% in 2018 to 2.9% in 2020, and the number of jobs supported by the industry fell from 1.6 million to 640 000.

The pandemic also plunged the world economy into its most serious challenge in the post-war era. Research shows that global output, employment, trade and investment have been impacted negatively.

According to the International Monetary Fund (IMF), global recovery from the “severe collapse” of 2020 is expected to vary significantly across countries.

Max Alier, the IMF resident representative for South Africa, said global tourism recovery would depend on access to medical interventions aimed at containing Covid-19.

Alier said this indicates the significance of vaccine deployment in global economic recovery.

“The global recovery of travel and tourism will depend on progress in the development of Covid-19 vaccines and on their widespread availability – an area where global public action can play a role.”

He said more than half of all advanced market commitments for vaccines were made by high-income countries.

“Addressing the challenge of universal accessibility for low-income countries will require collaboration among governments, the private sector and global health agencies,” he said.

Tshivhengwa said there exists an uphill battle in stimulating demand for the tourism industry. He said travellers need to trust South Africa as a tourist destination.

“We believe other countries will also open up travel with South Africa following this move by the UK. Countries such as Australia follow UK decisions closely. We are also hoping this will open up global tourism and will increase international demand for South Africa,” Tshivhengwa said.

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