Graham and Jenni Rowe, owners of Harfield Guest Villa, have about six months left to find a buyer for their property.
If they don’t, they risk losing everything they have worked for, for the past 25 years. And they are not the only ones. Across South Africa, hundreds if not thousands of guest house and B&B owners are staring the same harsh reality in the face.
Google the address of just about any guest house anywhere in the country and chances are you will find it listed on a property website.
In a bid to stay afloat, the parents of two school-going kids had to cash in all their retirement annuities. They also asked for an extension on their bond last year and are in the process of applying for another one.
“Luckily, we are healthy. I don’t mind working until I fall down. I don’t want to retire. I would have loved to have done this for the rest of my life. The reality is this is not going to last for another six months,” he shares.
According to Graham, most guest houses and B&Bs haven’t reached 30% occupancy since 1 April last year.
“We have lost two-and-a-half seasons so far as there is not one booking for the coming season.”
To keep the lights on, Graham has taken on a second job as an estate agent at a well-known real estate agency.
“The accommodation industry was always a marginal business anyway. At one stage, there was a complete oversupply of accommodation in Cape Town. We were competing against large hotel groups. And then with the drought (2015 to 2017), we had to install huge water tanks. When Covid-19 hit, we, and many other guest houses, were just (or not even) scraping by,” says Graham.
And unlike other hard-hit industries, the guest house sector didn’t just stop bringing in money from 26 March last year when hard lockdown began – it had a negative income.
Graham explains: “The first wind that we got that we were going to get cancellations, or that people were not going to travel, was an automatic email reply from Booking.com on 14 March 2020, stating that a guest’s request for free cancellation of a booking had been granted.
“This particular booking was made as a non-refundable (guests who opt for a no-refund policy get a 10% discount) and was cancelled by Booking.com free of fees even before we knew it was cancelled.”
Declaring force majeur (forced circumstances), the online travel agency for lodging reservations and other travel products instructed all of its “partners” to refund any prepayment and/or waive any cancellation costs for all reservations cancelled within the forced circumstances period. Should they not comply, Booking.com stated they would refund the guest on their behalf and their property may be invoiced for the same amount.
“There were many others (who requested cancellation). Most we only partly refunded. We made a few arrangements for refunds over a period with others. We are still paying them off. Others have taken a credit, still to be used. Some had not paid any deposits yet so we lost 100% of those. A lot of guests were regulars who stayed every week or month. I haven’t seen them for 18 months,” he says.
With this being the experience for guest house owners across the board, Graham says many ended up feeling abandoned by the big online companies which provided them with the platforms to get bookings in the past. He says Booking.com was the most heavy-handed with no compromise or consultation.
“The command to refund was not thought through at all. Airbnb and others were a little more accommodating and used less forceful language,” he says.
He adds that while he understands their sector isn’t the only one fighting this fight, it does seem the leaders who represent other industries, for example, the liquor industry and even churches, are using their voices more loudly. He says, except for a few exceptions, like Wendy Alberts, the Chief Executive Officer of the Restaurant Association of South Africa (Rasa), the industry representatives in the tourism and hospitality sectors are dead quiet. “They seem to expect us to fight for ourselves as individuals which we know is futile. There does not seem to be any collective voice and strong representation at the top.”
At the end of the day, he says, it is the people who worked in hospitality – the housekeepers, the front-office manager – who are feeling it the most.
“We currently have no employees where we once had eight. With all of the hotels and guest houses closing down there are so few jobs left. They are going to struggle to get employment in this industry ever again. I cannot see this thing turning around soon.”