Having received a hammer blow from Covid-19, South Africa’s tourism sector needs to find innovative ways to bounce back.
When news came that the iconic Lord Charles Hotel in Somerset West was closing its doors permanently at the end of August 2020, former guests took to social media to express their shock and disappointment.
For more than 30 years this landmark establishment has hosted memorable events, from weddings to corporate conferences, and is known as a gateway to the Cape Winelands.
While a feasibility study done in 2019 pointed to the hotel’s struggling financial situation, it was the lack of business owing to the Covid-19 lockdown that landed the death blow.
Lord Charles Hotel is not the only tourism-related business in the country – and indeed the world – that is reeling. According to some reports, the six-month closure of hotels and the cancellation of flights have caused a loss worth R68 billion in South Africa.
More than 600 000 tourism employees have applied for Unemployment Insurance Fund assistance.
Tourism is an important part of our economy – it contributes about R425 billion to GDP (about 8%) and provides 1.5 million jobs.
Although South Africa reopened its international borders on October 1, not all international flights are operational yet and travel is restricted to countries with low infection rates – excluding tourists from main departure regions such as the US and the UK.
According to Sisa Ntshona, CEO of SA Tourism, the industry in South Africa may take two-and-half years to recover to 2019 levels.
For those in the tourism industry, if ever there was a time to share new ideas, launch collaborative partnerships and find different ways of operating, it is now. And at a recent Future of Tourism Bootcamp, hosted by the Solution Space at the University of Cape Town Graduate School of Business, this is exactly what they did.
More than 60 participants from across South Africa and Botswana pooled ideas ranging from the high-tech (for example virtual destination tours, such as an enhanced Google Street View), to the more practical (for example reducing the need to physically stand in queues at places such as the Cape Town cable car ticket office).
The winning entry was a virtual art tour which combines mobile technology with an actual road trip, the idea being to guide people on a physical tour and once they get to the venue showing them what can be seen inside via a screen.
This neatly removes the need for social contact and satisfies health regulations regarding Covid-19 while still offering a real experience.
The potential for an app like this to be used at big events such as art exhibitions, festivals and conferences – where limitations on gatherings of large groups of people is likely to remain for some time – is significant.
As the winning entry, this app will be developed into a solution that will hopefully soon be made available to the general market.
Of course, innovative ideas like this can’t take place in a vacuum. The sector also needs government, at a regulatory level, to find new ways to stimulate the sector and support local businesses.
Thus far, government has launched a R200 million tourism relief fund, waived tourism grading-fees and announced measures to promote domestic tourism, including the introduction of a two-tier pricing system – one for local tourists and one for foreigners – to make local destinations more affordable.
Some tourism outlets are already experimenting with pricing. Grootbos Private Nature Reserve, a “five-star ecoparadise near Gansbaai in the Western Cape”, for example, launched a Spring Splendour Special at the end of August, discounting its accommodation by 55%, which has helped ensure that most weekends are now fully booked until mid-December, with good occupancies during the week too – all from local tourists.
While these initiatives will undoubtedly help, it is likely that much more will need to be done to keep the sector alive.
The reality is that South Africans at this point have precious little extra spending money. A June 2020 Cape Town Tourism survey showed that only 24% of South Africans said they had discretionary income currently, but only 5% were planning to spend it on leisure.
And while many operators are pinning their hopes on further restrictions being lifted to allow for more international travel, this is likely something not to be relied on. Some analysts are predicting that global tourism spending is unlikely to return to pre-crisis levels much before 2024.
Clearly, this is no time for business as usual. A new report from management consulting firm McKinsey urges countries to ramp up on coordination efforts between the public and private sectors to work together to protect jobs and tourists, provide financial relief, foster clear communication, and provide data infrastructure and capabilities to enable the sector to investigate new and innovative operating models, among other things.
Meanwhile, there is much that individual South Africans can do to support the tourism sector to help save jobs and businesses.
As Sharmila Ragunanan from Dream Hotels and Resorts says: “You don’t need to travel to France for culture. You don’t need to visit Italy for delicious food. You don’t travel to the US for spectacular natural phenomena. You can enjoy all these experiences right here in South Africa. When they say the destination offers a world in one country, they’re right.”
Yabo is a programme manager at Solution Space