BLSA chief executive Busi Mavuso.
BLSA chief executive Busi Mavuso.

BLSA: Tourism and its not so rosy outlook

By Opinion Time of article published Oct 22, 2020

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Busi Mavuso

JOHANNESBURG - Tourism industry needs urgent intervention

JOHANNEBSURG - The Covid-19 pandemic has been an extraordinary economic crisis, as its effects have reached into all our cities and villages at the same time. Although no industry has not been affected in some form, tourism has borne the brunt of its damaging effects.

The labour-intensive sector has suffered the full effects of international and interprovincial travel coming to a halt in the hard lockdown. Tourism is the last sector to emerge from the lockdown hibernation. It’s a groggy awakening that needs urgent attention as we head into the sector’s peak trading season.

Restrictions on tourism businesses have eased since the end of July, but Statistics SA data for August showed how hard the road ahead was for the sector. Income for the country’s tourist accommodation industry fell 81.2 percent in August compared with the same month last year. There was a 79.4 percent decrease in the number of stay unit nights sold and a 14.3 percent fall in the average income per stay unit night sold.

Commenting on the data, Tourism Business Council of SA chief executive Tshifhiwa Tshivhengwa was quoted as saying that local tourism is increasing but at heavily discounted prices.

“This is because the industry has lowered its prices due to subdued demand. So, even if occupancy levels have gone up, it is not the case from an income point of view. Nonetheless, the little bit of movement there was is not sufficient, and we hope towards the high season there will be better movement in the industry, which is experiencing tough times.”

The devastation caused to this industry is all the more concerning as it is a significant employer of women (as high as 70 percent) and youth. It incorporates about 49 000 small and medium-sized enterprises with high employment ratios of low- and semi-skilled people. It generates economic activity, employment and entrepreneurial opportunities in remote areas of the country.

Much riding on the economic recovery plan presented by President Cyril Ramaphosa last week, not only the longer-term prospects for the country, but in the short term to support industries such as tourism.

The focus on tourism in the plan is, therefore, vital to the country. It included measures to relax visa regulations, implement an efficient e-visa system and extend visa waivers to new tourism markets. Furthermore, the expanded list of countries from where resumption of international travel will be permitted will be supported by targeted marketing in partnership with the private sector. Some of these have been previously announced by the president, but we have not seen action in implementing them. We hope this happens quickly.

We expect to see a continued improvement in tourism figures as we close out the year, but largely on the back of domestic travel. Although our international borders have reopened, international tourist numbers are likely to remain limited as the US and Europe deal with a second wave of the pandemic. This is further evidence of the interconnected nature of the global economy.

From an initial list of about 60 countries, South Africa’s red list of countries from which tourists are not allowed stands at 22. Tragically for the tourism sector, eight of the top 10 nations from which the bulk of our foreign visitors usually come are on the list. These include the US, UK, India, Germany and France. The only two nations in South Africa’s top 10 that have escaped the ban for now are Australia and China, which between them make up less than 10 percent of our overall visitors. Going into our peak December holiday period, this paints a worrying picture for a sector that relies on high-spending international tourists.

We understand that the health of all South Africans should be given full consideration, and as such we should be on our guard about who enters the country at this point.

But, rather than maintain the red list of countries from which visitors are banned, we urge the government to consult with the tourism industry – something which, unfortunately, it did not do. What’s particularly concerning is that David Frost, the chief executive of the Southern African Tourism Services Association, says industry representatives called for a technical task team over three months ago to work together to reopen borders.

Diplomats, business travellers and sportspeople, as well as “long-term visitors”, from countries on the red list are already allowed in if they have tested negative for the virus 72 hours before arrival. It therefore makes little sense, argues Tshivhengwa, to forbid leisure travellers who also test negative.

* Busi Mavuso is the chief executive of Business Leadership South Africa.

BUSINESS REPORT

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