Can SA's tourism sector survive 2020 without international visitors?
South Africa’s tourism industry accounted for roughly three percent of national GDP before the pandemic hit.
It contributed to 725 000 direct jobs and over eight percent of total investment spend in 2019 according to the Tourism Sector Recovery Plan.
The sector now faces a potential 73 percent revenue reduction in 2020 in the worst-case scenario, with 438 000 jobs and R82.5-billion in foreign capital at risk, unless a massive recovery is realised in this year’s remaining quarter.
Despite being a step in the right direction, Anton Roelofse, the regional general manager of Business Partners Limited, says the country’s recent move to alert level two is not enough to recover the industry needs.
“While there has been an initial uptick in domestic tourism, the economic reality is that South Africans, given the rising rate of unemployment and widespread financial struggle, will have increasingly less money to spend on luxury items like tourism. Furthermore, businesses that were traditionally geared for international tourism are now having to adapt to target a local audience, adding more competition to an already saturated market," says Roelofse.
For this reason, Roelofse says that the South African tourism industry desperately needs international borders to open, and international leisure travel to be permitted.
“To put things into perspective, in 2019, tourism spend by Americans in South Africa was R11.8-billion, while Europeans spent R30.5-billion. Our luxury accommodation and tourism businesses depend on this international spend to cover their high overheads, which means many will struggle to survive on a local-only clientele," he emphasises.
CEO of Marine Dynamics Wilfred Chivell says up to 90 percent of their business is dependent on international visitors. They offer shark cage diving, whale watching and eco-tours in Gansbaai.
“You can prepare for various factors across our business model, such as lack of sharks, for example, as we then have our volunteer and intern programme – the Marine Dynamics Academy – to rely on, and the restaurant would be functioning. But Covid-19 forced the closure of services across the board. This was a crisis that we could not have prepared for,” says Chivell.
Roelofse says that the socio-economic impact of the Covid-19 crisis cannot be ignored.
“There are a lot of well-qualified professionals in the hospitality industry who will battle for some time to find suitable employment. This will have a massive impact on many South African households, as well as the total revenue base for South Africa.”
He says that the tourism industry is one of few sectors that can recover quickly and resume its significant contribution to the country’s GDP, but only if international visitors are allowed and willing to enjoy what the sector has to offer.