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Load shedding devastating our sector, Tourism Business Council warns

Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of South Africa. Photo: File

Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of South Africa. Photo: File

Published May 16, 2023


Stage 6 load shedding – let alone any higher stages – was devastating for the economy, as well as the tourism industry, Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of South Africa (TBCSA), said this week.

Stage 6 load shedding should not be allowed to go on for a protracted period of time, he said.

“Our businesses are finding themselves without power for four-hour cycles. We are spending more money on diesel to power generators for our establishments. Even businesses who use some form of renewable energy are feeling stretched,” Tshivhengwa said.

He said they were going to see diesel and purchasing of generators become a more prominent line item for the operational costs of businesses.

“It will cut our profits due to increased input costs,” Tshivhengwa lamented.

Meanwhile, the Capital Hotels, Apartments & Resorts said it was taking matters into its own hands, rather than waiting for someone to save them, “since no matter which way you slice it, load shedding is doing an incredible amount of damage to the locals”.

According to Investec, load shedding cost South Africa R300 billion last year and resulted in the loss of 5% of gross domestic product.

For the hospitality industry, already reeling from the impact of the pandemic, the threat of winter where businesses must regularly face 10 hours and more without electricity will derail the gains the sector has made.

As a result of frequent power cuts, the hospitality sector has had to adapt to a whole host of new issues that has resulted in ballooning operational costs.

With load shedding expected to continue for at least the next two years, with some predicting even longer, business have to consider power alternatives.

Meanwhile, Marc Wachsberger, CEO of The Capital Hotels, Apartments & Resorts, said in an interview that they had put plans in place to protect guests from load shedding.

“We have created an oasis of normality in what is becoming an increasingly turbulent country, and have some ground-breaking steps to ensure that nothing disturbs a visitor’s time with us,” Wachsberger said.

This meant a significant amount of investment had been put into back-up power and water supplies with several properties in the group being able to run for days without those essential services. A prime example of this was the solar panel pilot project at The Capital Empire.

In October, The Capital, in partnership with Rhino energy, invested almost R2 million in creating solar power infrastructure that reduced their dependence on Eskom.

With little maintenance required and a lifespan of 20 years, the move showed how sustainable thinking could produce solutions that outlast current woes, Wachsberger said.

He said the project had been such a success that from next year The Capital would spend R10 million rolling out the programme out across three more of their properties, and within the next two to three years 80% of the group’s properties would be solar powered.

However, Wachsberger said the effects of load shedding on the hospitality industry could not be overstated. Power outages meant that guests were left in the dark, elevators stopped working and kitchen equipment ground to a halt.

The CEO said one of the many unforeseen consequences of never-ending load shedding was protest action and socio-economic disquiet, which also had to be planned for.

The SA Reserve Bank’s Quarterly Bulletin for 2022, said it found that South Africa had lost 1.6 million work days in the first six months of 2022 due to industrial action.

In March, the EFF’s call for a national shutdown had businesses and the government in a state of panic at the potential repercussions, but the protest was quelled.

The coming cold spells, increased load shedding and the economic impacts were likely to lead to even more protest action, industry players warned recently.

But Wachsberger said, “The hotel groups that not only provide basic services like electricity and water, but also go above and beyond to ensure guest safety in the face of any eventuality will be the ones with the edge.”

He warned that the impacts of load shedding would be felt by the hospitality sector for years to come. However, this did not mean it was all doom and gloom.

According to the World Travel Tourism Council, the Rainbow Nation’s tourism industry had a bright decade ahead of it.

“If all goes well, the industry is projected to create 800 000 jobs; grow at 7.6% per year; and contribute more than half a trillion rand to the country’s economy by 2032.

“For innovative hotel groups with the power to pivot, that means the next decade could be brighter than our current load shedding woes would have us believe,” a hopeful Wachsberger said.