Tsogo Sun Hotels confirmed its operations felt the full impact of the  Covid-19 pandemic as tourists stayed away.  Supplied
Tsogo Sun Hotels confirmed its operations felt the full impact of the Covid-19 pandemic as tourists stayed away. Supplied

Tsogo Sun feels pinch as tourism industry in free fall

By Sandile Mchunu Time of article published Jun 1, 2020

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DURBAN - Tsogo Sun Hotels on Friday confirmed its operations felt the full impact of the coronavirus (Covi-19) pandemic in the fourth quarter of its financial year as tourists stayed away and hotel doors closed as a result of the national lockdown regulations imposed to contain the epidemic. 

The group said occupancy at its hotels tumbled 59.3 percent during the quarter that runs between January and March when it normally had its peak trading period. Tsogo Sun said the pandemic saw international demand retracting as early as the last week of February. 

“The initial international travel regulations imposed by President Cyril Ramaphosa on March 15 and finally the total ban on interprovincial travel announced on March 23 as part of the nationwide lockdown resulted in a material reduction in revenues for the month of March, which is normally a peak activity month,” the group said. 

BDO director of tourism and travel Lee-Anne Bac said the average hotel occupancy fell below the usual rate in 2020 compared with the period precedind the travel restrictions. Bac said occupancy eased to 37 percent in March from 68 percent during the same period last year. 

“The hotel occupancy rates in 2020 had been in line with normal trends, in January at 57 percent and February at 68 percent compared to the same months last year,” she said. 

The lockdown impacted all hotels, lodges, bed and breakfasts, Airbnb, timeshare facilities, resorts and guest houses as trading during the period amounted to zero, except for a selected few which were used to quarantine travellers from abroad. Tsogo Sun Hotels, which was unbundled from Tsogo Sun Gaming last year, said its losses rose to R1.23 billion while operating loss was R766 million compared with operating profit of R380m last year. The group said it also suffered R7bn exceptional losses as a result of the revaluation of externally managed investment properties, property, plant and equipment impairments in South Africa and offshore. The group said while it supported the government’s efforts to safeguard the health of citizens, the prolonged lockdown would have a devastating impact on the South African economy in general and the southern African travel and tourism industry and its employees in particular. 

“No industry can survive extended periods without revenue. We welcome the recent announcement by President Ramaphosa of the move to level 3 and appeal to the government to continue to open the economy as quickly as possible, with due  regard for safety,” the group said.

BUSINESS REPORT 

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