- The Tourism Business Council of SA is pleading to government to lift restrictions on international travel earlier than planned.
- This is as a jobs bloodbath is expected in the tourism sector.
- 50% of tourism businesses could not cover debt repayments or fixed costs in March, Parliament was told.
The Tourism Business Council of South Africa (TBCSA) wants government to lift restrictions on international travel earlier than planned and to present clear plans as to when the tourism sector will be fully operational.
This is as Parliament heard on Tuesday that government could soon find itself in a race against time to revive the tourism industry in order to avoid 1.2 million job losses in the sector and a colossal fall in gross domestic product (GDP) contribution.
The council believes presenting clear plans and dates will allow agencies to prepare bookings, give customers confidence of returning to South Africa and save the summer tourism season.
The country's borders have been shut since March when a nationwide lockdown was imposed to curb the spread of the coronavirus.
Members of the council made presentations to a virtual sitting of Parliament’s Portfolio Committee on Tourism on Tuesday.
According to the TBCSA presentation, domestic leisure and corporate travel is expected to resume on 1 September and international borders will be fully open by March 2021 when all travel will be allowed.
In May, Tourism Minister Mmamoloko Kubayi-Ngubane announced the opening up of some business operations under Level three lockdown regulations.
Southern African Association for the Conference Industry (SAACI) CEO Glenton De Kock said the industry is at a standstill but since June there has been a small re-start.
"In the short-term view is against the hope that we can operate sooner than the dates that are floating in the public domain," he said.
De Kock added:
He also said more than 58% of businesses could not cover debt repayments in March while 54% could pay fixed costs for the same month.
The TBCSA also conducted research and created scenarios for the revival of the sector.
In scenario 1 (the best case), there would be 20% international tourism in the third quarter and domestic tourism will average 41.8% for the year.
This will lead to R171.4 billion less tourism spend and the loss of a million jobs.
Scenario 2 (worst case scenario) foresees no international tourism for the third quarter of 2020, and domestic tourism is expected to average 30.2% for the year.
It also projects a R195 billion less tourism spend while 1.15 million jobs are expected to be cut.
In scenario 1, GDP will decline from 8.7% to 3.2% and 2.5% in scenario 2 – the worst possible case.
By the second quarter of 2021, the council estimates about 1.4 million job losses.
Given the current timelines, the industry expects to achieve 18% annual turnover while 46% of business will still be partially or completely closed in February 2021.
It's further estimated that more than 600 000 direct jobs will be lost.
"If we achieve only 18% turnover, we will see a R49 billion decline in the industry spend. We then have to ask, how do we save the six hundred thousand jobs and other indirect jobs that will also be affected," De Kock said.
He said agriculture, manufacturing, vehicle renting, textiles, furniture, retail and construction will also be affected by the slow growing tourism sector.
Committee chairperson Supra Mahumapelo said the tourism sector has been severely affected and would need all the support it can get.