Tourism industry is still on the ropes

Latest tourist accommodation statistics show revenue in the sector is still 60% lower than normal.

While the latest survey of tourism accommodation suggests that tourism and business travel in SA continue to recover strongly, the occupancy rate of hotel and tourism accommodation and revenue earned from accommodation are still way below normal pre-Covid-19 levels.

The latest Statistics SA report on tourism accommodation shows that the number of nights sold in different accommodation types (from hotels and guest houses to caravan parks and campsites, as well as breakaways on farms and other types of accommodation) increased by some 134% in August 2021 compared with August 2020.

This big recovery in bed nights sold follows even larger increases in the preceding months. Compared with a year ago, July clocked up an increase of 225% and June more than 580%.

The increases of over 2 100% in April and 1 750% in May show that the figures are actually irrelevant – travel was banned during April and May 2020.

Likewise, the strong recovery in income earned by hotels and guest houses over the last few months is welcome, but also still only a fraction of normal levels.

“Measured in nominal terms [at current prices], total income for the tourist accommodation industry increased by 88.3% in August 2021 compared with August 2020,” according to the report. “In August 2021, all accommodation types recorded large positive year-on-year growth in income from accommodation.

“The largest year-on-year increases in income from accommodation were reported by caravan parks and camping sites (263,2%) and guest houses and guest farms (257,9%),” says the Stats SA report.

However, a closer look at the figures themselves show that things are not as good as the huge recovery in percentage terms suggests.

Income from accommodation

Total income from accommodation (excluding restaurant and other income, which is still reliant on room occupancy) increased to just less than R890 million in August from R406 million in August 2020.

Total income is still a fraction of what it was in “normal” times. In August 2019, the industry reported income of approximately R2.4 billion.

Annual figures confirm the devastation of the industry during 2020. Total income from accommodation increased steadily year after year, from R27 billion in 2016 to R29 billion in 2019. It fell to only R11 billion in 2020, as hotels, guest houses and nature reserves earned very close to nothing for four months, and very little in the other months of 2020.

National chair of the Federated Hospitality Association of SA (Fedhasa) Rosemary Anderson also points out that while total income for the tourist accommodation industry increased significantly, we know that in August 2020 tourism and hospitality had not been opened up after the pandemic first hit to the same extent as it opened up in August 2021.

Anderson notes that when more travel was allowed there was a good uptake of caravan, camping, self-catering and guest house type accommodation, because “tourists gravitated towards accommodation settings which did not involve many other people and where they could stay within their own bubble”.

“The UK experienced very similar trends in accommodation when it opened up – where self-catering was up significantly on other accommodation sectors. This has been good for some sectors, but damaging for the larger hotel groups,” says Anderson.

Government assurance needed

While Fedhasa acknowledged the big recovery in income in the hospitality industry, it added: “What we really need now, is to be able to have government assurances that any increase in Covid-19 cases or a so-called fourth wave will be controlled through a big vaccination push, as they have done successfully in the UK, and not by any more shutdowns – or restrictions on the very basics of what tourists enjoy while being on holiday, like their favourite wine, beer or malt, and being able to enjoy the night life and freedom to travel inter-provincially.

“As Fedhasa we urge government to put a tremendous push on the vaccination programme as the way to either prevent or control the fourth wave and not even contemplate introducing restrictions again, which will make tourism and hospitality simply financially unviable.

“We simply can’t take any more knocks than we have had,” says Anderson.

“There needs to be some form of guarantee and assurance from government that they will allow hospitality and tourism to continue to recover, without setting us back again.”

Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of SA (TBCSA), also finds the possibility of restrictions during the upcoming holiday worrying.

TBCSA, describing itself as the umbrella organisation representing the unified voice of business in the travel and tourism sector, says the figures in the Stats SA report illustrate the effect of the lockdowns during 2020 clearly.

International tourists

“There has been recovery, but the tourism industry is still suffering due to the absence of international tourists. An increase in local travel during the holiday period will definitely help, but the industry is still reliant on foreign travellers spending dollars.

“The truth is that establishments need to make money to survive and pay their staff and other costs. Most employees in the sector are still working only a few days per week, and temporary seasonal workers not at all,” says Tshivhengwa.

He hints that hotels and guest houses are currently offering discounts to local travellers, just to earn a bit of income. “We need overseas travellers. We must be mindful of what people pay,” he says.

The difficulties of the tourism industry can be seen in any town that is dependent on tourism such as Cape Town, and it even affects Johannesburg, he adds.

It is noticeable to the casual observer. Restaurants aren’t full, it’s easy to get a room (for a good price) in a guest house, and shops in tourism hot spots are standing empty.

Meanwhile, potential holidaymakers are holding off booking a holiday this year – after they were forced to pack up halfway through their break last year and head home.


Filed Under: HotelsTourismHospitalitycovid-19

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