Coronavirus | SA's luxury tourism sector 'floundering'

The impact of the coronavirus pandemic has been devastating for South Africa's luxury tourism sector, according to Suzanne Bayly-Coupe, the CEO of Classic Portfolios, who has been operating in this market segment for 20 years.

After initially thinking the virus was likely to be just "a short-term blizzard", Bayly-Coupe says the luxury market has realised it is in for a far bigger storm heading into the winter season. 

The overwhelming majority of bookings made in the luxury tourism segment in SA for the next two to three months have been postponed, not cancelled outright, she said during a webinar hosted by SA Tourism on Thursday. The sector, she said, had been "knocked very badly".

She advised business owners to keep a close watch that the postponements are not simply cancelled later on, and start to plan for when the pandemic ends. "Be strategic and prepare yourself for when the pandemic comes to an end. Leave behind what was not working. Markets always rebound," she said. 

This comes as global confirmed coronavirus cases worldwide breached 1.7 million on Saturday, with more than 100 000 deaths, according to John Hopkins University. International air travel has collapsed, with the International Air Transport Association projecting that passenger revenues will be $252 billion lower this year compared to 2019. 

"Luxury lodges and hotels have been knocked very badly. We were not prepared for it at all and were anticipating 2020 to be a fantastic year with positive growth," said Bayly-Coupe.

"We try to be flexible and collaborative, but it is causing lot of tension and uncertainty among trade partners."

Recovery Plan 

South African Tourism is compiling a Tourism Recovery Plan and hosting a series of webinars to engage the industry on solutions and scenarios. This is in a bid to limit the damage suffered by an industry critical to the country's economy.

According to data from the World Travel and Tourism Council, in 2018 tourism contributed some R425 billion to South Africa's economy. The same year, SA's local tourism industry generated direct foreign spend of R82.5 billion. A total of 722 013 people, or one in every 22 working South Africans is employed in the sector, Fin24 previously reported.

The World Travel Council now says the global tourism industry is in "uncharted territory".

"Our sector is uniquely exposed, and in a fight for its survival," it states on its website. 

South Africa's Department of Tourism, meanwhile, is accepting applications for once-off grants from small and medium enterprises – such as bed and breakfasts, certain restaurants, lodges and coach operators – that have been impacted by the coronavirus pandemic. The grants will only be open to Exempted Micro Enterprises.

Conservation costs remain 

Bayly-Coupe said she had noticed a great deal of anger and negativity in the luxury market segment.

"At the start of the pandemic, we were just having to manage your own business problems regarding occupancy and whether to stay open or not, and then the lockdown suddenly came," she said.

"Now it has become an issue of what to do with teams on the ground, managing staff and just trying to hold things together. I am dealing with lodge and hotel owners floundering in that sense." 

"It has become about how to protect your business, yet having to change your terms and conditions," she told the webinar. Furthermore, the responsibility and related costs of conservation - including anti-poaching measures - remains for owners of luxury lodges.

"But I want to say to everybody out there: as hard as it is, now is a good opportunity for us to see how we can reshape going forward and rethink our businesses and business models.

"We have seen how essential really good partnerships are in this industry. There is no crystal ball, rather a muddy soup. We have to be more dynamic and think out of the box, for instance about rates, and be far more responsive to our market. In this Covid-19 environment people want space. We can give that to them. They can come and sleep under the stars," she said.

"We have to take stock, not panic and be agile and adaptable. We are dealing with unchartered waters into which we cannot take our old way of thinking and doing. Be strategic and prepare yourself for when the pandemic comes to an end. Leave behind what was not working. Markets always rebound."

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