There will be 'nothing left' of tourism industry if it can only reopen in December, warns CEO

There will be "nothing left" of South Africa's tourism industry if it is only able to start operating in general again in December - as seems likely in light of current coronavirus projections - Tshifhiwa Tshivhengwa, the CEO of the Tourism Business Council of SA, has warned. 

The TBCSA is a not-for-profit umbrella organisation representing businesses in the travel and tourism sector. 

It has been estimated by the World Travel and Tourism Council that SA's tourism industry provided jobs for more than 700 000 people by 2019. The industry has been decimated by travel and movement restrictions imposed by in an attempt to curb the spread of the pandemic. 

A survey released by the council, in conjunction with the Department of Tourism on Friday, shows that 83% of the firms that responded said revenues for March 2020 were down more than 50% compared to March 2019. One in three firms, meanwhile, said their revenues stood at zero. 

About 58% of firms surveyed said they are unable to service their debts and 54% of firms were unable to cover fixed costs in March 2020.

A survey by Cape Town Tourism found that 56% of tourism businesses surveyed do not have a recovery plan in place. While many have explored various relief options, some have noted that the vast amount of paperwork has deterred them, while others say they do not meet the requirements for relief.

About 36% of respondents mentioned that they are only able to provide partial pay to staff, 31% have staff on unpaid leave, and a further 18% have had to retrench employees.
 
A large majority of respondents expect the impact of the lockdown to last between four and 12 months. About 83% of businesses indicated that they would not survive longer than six months under the current lockdown conditions.

South Africa's domestic tourism season will likely only start in December and international tourism only next year, Minister of Tourism Mmamoloko Kubayi-Ngubane recently indicated during an online briefing hosted by SA Tourism. She is hopeful that her department, in conjunction with SA Tourism, could have a tourism recovery plan ready by late May.

For Tshivhengwa, a key focus for national industry bodies right now must be to see how it can "de-risk" certain segments of the industry. The hope is that certain business tourism segments might be able to open sooner under lockdown if they can show that they have clear measures in place to prevent the risk of the virus spreading.

Under current regulations, most tourism establishments will only be able to open under Level 1 of the nationwide lockdown, while some will be able to operate under Level 2.  

The country is currently at Level 4, and the government has not yet indicted when this will be changed. 

'Nothing to reopen'

"The message the TBCSA is sending government is that, if we wait until December, there will be no hotels or events or conference organisers or tour operators left and we will have nothing to reopen," he said during a webinar hosted by SA Tourism on Monday.

The tourism industry is looking at what it can do to show government how it can operate safely at higher lockdown levels. In this regard, the TBCSA is developing protocols to be put in place when accommodation businesses open their doors again. It would like industry participation in making suggestions in this regard and then make a submission to government.

"It is very important for SA's tourism industry to speak in one voice when approaching government regarding lockdown and related matters. If we are going to be disjointed, we will not get much done," he added.

One ways in which the TBCSA is trying to assist businesses, is by trying to see if the Unemployment Insurance Fund would be able to extend its Covid-19 relief payments on tourism claims until the end of the year, since the projection is that the industry would only then be able to start operating again.

"Of course, it depends if there is money for that in the UIF kitty," said Tshivhengwa.

Sisa Ntshona, CEO of SA Tourism, the official tourism marketing arm of the South African government, said during the the webinar that government's concern is that the tourism industry is "about moving people in different areas", while lockdown is about stopping the spread of the pandemic. 

"We have no clue how long SA will stay on the current level 4 lockdown and when it might go to level 3 or even back to level 5. These are the variables out of our control," said Ntshona.

"We also don't know how long the phases of tourism activity returning will take, for instance first domestic, then regional and then only international."

Not operating in a vacuum

At the same time, the extent of a reactivation of the local industry will depend on bans and restrictions in place in countries from which South Africa used to get most of its international tourists.

It also depends how our source markets respond to the pandemic in terms of bans and restrictions.

An estimated 20% of the tourism industry are employed in food and beverage segment. The restrictions under the current level 4 allow restaurants to open for home delivery only. Hospitality industry body Fedhasa is working with regional and national government to unpack further easing of trade restrictions, guided by strict safety protocols it has developed for the sector.

The Department of Tourism has established a R200 million Covid-19 financial fund to help small and medium-sized businesses in the sector with a turnover of under R2.5 million. To receive aid, businesses would have to prove they are in distress because of the impact of the pandemic. Aid will be capped at R50 000 per business.

Trade union Solidarity and its civil rights associate, AfriForum, challenged Kubayi Ngubane's decision to use broad-based black economic empowerment scores to determine who is eligible for the R200 million in emergency funding. It was dismissed and the organisations now plan to approach the Constitutional Court.

On the weekend, the Black Business Council expressed its support for Kubayi-Ngubane, maintaining that she was right to prioritise BB-BEE policy in relation to aid to businesses in the tourism sector impacted by the lockdown restrictions.

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