South Africa’s tourism sector suffers huge revenue losses, industry players worried about losing regional hub status

South Africa’s tourism sector has lost an estimated R68bn in revenue amid the coronavirus outbreak, which has necessitated national lockdowns and enforced restrictions on global travel.

The R270bn tourism industry, which anchors South Africa’s less-developed provinces, is reeling and counting the cost of the worldwide pandemic, says Tourism Business Council of South Africa (TBCSA) CEO Tshifhiwa Tshivhengwa.

The entire value chain and associated industries that depend on tourism and hospitality are feeling the squeeze induced by the coronavirus crisis, The Africa Report has said. The R68bn revenue loss comes with loss of employment. The other industries and sectors we impact are going to suffer, this includes agriculture and the manufacturing of vehicles. We buy 12% of locally manufactured vehicles for car rentals.

“We are no different from what is happening around the world – it’s a global phenomenon,” South African (SA) Tourism CEO Sisa Ntshona told The Africa Report.

“Up to two weeks ago, 90% of airlines around the world stopped flying. On 26 March, we went into lockdown level 5. That meant all our borders were closed and tourism was not rated as an essential service. All activities had to stop within this sector,” explained Ntshona.

Right now, South Africa is three months away from its high tourism season, which begins in September. Between now and then, the ideal scenario for Tshivhengwa would be the re-opening of provincial borders. “The first phase of recovery is domestic. Open interprovincial travel. There’s no point saying hotels are open, but people cannot travel across the provincial borders,” said Tshivhengwa.

On Wednesday 17 June, President Cyril Ramaphosa announced that sit-down restaurants, movie theatres, licensed accommodation, casinos and business meetings would be permitted following consultation with industry. However, the country’s borders remain closed to international travellers and interprovincial travel is prohibited.

“In its current form, tourism is rated as a level 1 activity. The rounds of announcements you’ve seen lately is … recognition of some of these plans we’ve put in place to open up the sector,” notes Ntshona.

There is a new reality at hand for the sector. This was crystallised by the fact that, for the first time in its history, SA Tourism told people not to travel and cancelled the Africa Travel Indaba, said The Africa Report in its article. Indaba is the largest tourism and travel showcase on the continent and attracts a regional and global audience of buyers and service providers.

The tourism industry in South Africa wants to push for a reopening by September as there is a fear that the country could lose its status as a regional hub, especially in the Southern Africa Development Community (SADC). In this regional context, South Africa serves as a gateway destination to other territories within SADC. This enables the country to receive the most number of visitors, The Africa Report said.

However, a delayed re-opening could potentially leave a gap that might be filled by countries such as Tanzania and Kenya in East Africa. “We have already seen what’s happening in Addis Ababa, where a lot of people are flying on Ethiopian Airlines,” warns Tshivhengwa. “If we don’t have the function in SAA, other countries are going to be opened for other international airlines to fly directly. Qatar, for example, could fly directly to Gaborone. We will lose that status if we are not careful,” the TBCSA CEO cautioned.

“We must make sure the restaurants will be able to sell liquor in the evenings. The majority are evening restaurants and some operate from Thursday to Sunday, when the traffic is there. Liquor is a big part of the margins in restaurants. We hope the regulations that follow make business sense and ensure we can go back on our feet,” Tshivhengwa added.