Tourism players fear the industry will collapse
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Federated Hospitality Association (Fedhasa) chief executive Lee Zama said the mood among members was “sombre” while other industry leaders and unions said staff and business owners feared job losses and imminent bankruptcy.
Fedhasa represents about 2200 businesses in the tourism industry.
“The mood is sombre and a lot of people are going through depression because there is no income. Nobody would have preserved enough buffers to carry a whole organisation,” she said.
Zama said the industry was familiar with seasonal troughs and peaks, but nobody knew how to deal with the present crisis.
“We are navigating this in total darkness,” Zama said.
She added that the industry would not survive if it did not open soon and had submitted a proposal to the Department of Tourism to allow the sector to open under Lockdown Level 3, rather than Level 1, under current regulations.
“If we don’t (open) then we really and truly are going to be dead. We can’t have all hotels and establishments in this country dead until December or January,” Zama said.
She was confident the proposal was detailed and covered all health aspects to ensure staff and guests were safe, from screening of employees to how to handle laundry safely.
Peter Rose, chairperson of Umhlanga Tourism, which represents 430 businesses, said people were “desperate”.
“Most people do not have any income at all. In my guesthouse I have not had any income for two months and what’s worse is the cancellations. Every booking we had going to July disappeared and even after July the majority of them have disappeared,” he said.
Rose urged the government not to “destroy the industry with lockdown laws that are so severe that there is no more tourism industry left”.
“The consequences are just too horrendous for everything - employment VAT, SARS , food, everything,” he said.
He was also concerned that the tourism industry would lose hundreds of millions of rand if the Durban July was cancelled.
Earlier, Tsogo Sun, owners of Beverly Hills Hotel and the Elangeni and Maharani in Durban, announced on March 20 that the chain would close 36 hotels, representing 7700 rooms (or 40%) of the group’s portfolio.
“We intend to still retain significant operating capacity in our key nodes for the foreseeable future,” Tsogo Sun said.
Health & Other Services Personnel Trade Union of South Africa spokesperson Kevin Halama said staff at South African National Parks (SANParks) were concerned about losing their jobs and salary cuts, although their employer had not raised the issue.
Shaun Lamont, general manager of First Group, which owns 25 resorts, said it was not considering retrenchments. “We are being optimistic. Our assets are our employees and we have to look after them as long as we can,” he said.
Danny Bryer, Protea Hotels by Marriott area director for sales and marketing said the chain was experiencing “significant drops in demand at properties globally with an uncertain duration”.
“We are adjusting global operations accordingly and working quickly to mitigate the impact to our business,” he said.
Economist Mike Schussler said the tourism industry would shed 85% of its jobs.
He earlier estimated that the hotel and restaurant industry would shed 75% of its estimated 375000 jobs.
“I think we are going to look at a hotel industry that is in severe danger of complete collapse. The government should’ve used this opportunity to pay hotel groups something to look after the frail and old,” Schussler said.
Economist Dawie Roodt said that even if the industry opened soon, business would be slow as families wouldn’t splurge on holidays, which were a luxury.
“The damage is done. It is not going to come back for a very long time for various reasons economic reasons because people simply aren’t going to have money to spend and a trend seems to be emerging that lockdown has permanently altered the way we live,” he said.