“The reality is that due to no income for such a long period you will now see the death of restaurants of all sizes at a massively accelerated speed,” he said. Read: Strategies Africa’s tourism requires to manage blow from coronavirus Jorberg said contrary to popular belief, restaurants by their nature are not “super-profitable” and rely on cash flow because the business has a lot of running and fixed costs, which is why the ones that don’t succeed at attracting customers close after a year or two. “No one can change the fundamental issue which is restaurants have no way to make up the loss of income during this period,” said Jorberg, explaining that while some industries may be able to claw back some of the losses made during the lockdown, for a restaurant, a seat that is not sold today “cannot be sold twice tomorrow”. “I personally don’t see a future for most of my business,” said Randolf Jorberg, chief executive of bar chain Beerhouse and founder of Hospitality Leadership, an interest group consisting of the founders and directors of restaurant and hospitality companies. Signs of recovery may only be seen two years from now, said Zama, when taking into account that only business travel and accommodation will only be allowed in June. “Like any segment of the economy, we are aware of the virus and the economic impacts thereof and we will put sufficient safety mechanisms to protect our employees, our guests and the country,” she said. Zama said the sector should be opened further because the extension of the restrictions beyond the current moment would “result in an even bigger demise of the sector” requiring an even longer recovery period. “There’s an unfortunate understanding that the tourism industry is the one that brought the virus and is responsible for distributing it around South Africa,” said Zama. Ramaphosa said the government would consider the proposals that have been made by the tourism, hotel and restaurant industry regarding the health and safety measures they will put in place when they are permitted to open but gave no definitive timeline on when that will be.Īccording to the government’s five-level risk framework, activities in the tourism and hospitality sector largely fall under alert Levels 2 and 1, where there is a reduced chance of infection. “Our members have lost a lot of money, there are very few small businesses that would have a buffer for four or five months without any income,” she said. Read: Minister asks tourism to be creative post Covid-19 “A total devastation,” said Lee Zama, chief executive of the Federated Hospitality Association of Southern Africa in describing how the virus has impacted the industry.Īpart from a few hotels that have been enlisted by the government to provide quarantine facilities the industry was completely closed down Zama explained. When it comes to employees 50% of the respondents had reduced staff wages, 32% had placed workers on a leave of absence and 11% have made their workers redundant. In April the International Finance Corporation together with the Department of Tourism and the Tourism Business Council of South Africa released the first of three surveys looking at the impact of Covid-19 on businesses in the sector.Īmong 1 610 respondents, 99% of the firms said they had been negatively affected as 58% were unable to service their debts and 54% could not cover their fixed costs in March. Much of the industry will remain so as the country moves to Level 3 in June in order to “maintain social distancing” said President Cyril Ramaphosa in a televised national briefing on Sunday. When SA implemented a hard nationwide lockdown in March calling for strict physical distancing and limited economic activity the sector which involves, travel, accommodation, conference centres, restaurants, bars and other leisure activities, was brought to a standstill. The World Travel & Tourism Council report says in 2018 the sector contribut ed 2.8% of the country’s real GDP while its indirect contribution accounted for 8.2% of GDP. With the country gearing to ease lockdown restrictions even further, one industry getting left behind is the tourism and hospitality sector.Īccording to Statistics South Africa’s Tourism Satellite Account released in 2019, the sector directly employed 740 000 in 2018.
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