INFOGRAPHIC: Survey shows shocking effect on tourism businesses in SA
The tourism industry in South Africa, which supports 8.6 percent of South Africa’s GDP, has been hit by the Covid-19 pandemic.
In the Tourism Industry Survey of South Africa: COVID-19, the Department of Tourism in collaboration with the Tourism Business Council of South Africa (TBCSA) and IFC, a member of the World Bank Group, surveyed 1 610 respondents to find out the extent of the coronavirus pandemic on South Africa’s tourism industry.The survey found that 99 percent of respondent businesses have been impacted negatively by Covid-19.
The survey also found that 64 percent of the respondents felt neutral or believed their business will survive to take part in the recovery. Around 83 percent of firms report revenues in March 2020 are down more than 50 percent compared to March 2019, and 34 percent of firms say revenues are 100 percent less.
Around 58 percent of firms were unable to service their debts, and 54 percent of firms were unable to cover fixed costs in March 2020. Firms so far report having managed their workforce in different ways, with most favouring reduced wages over furlough or redundancies. About 50 percent of firms have reduced wages for more than 50 percent of staff, and 36 percent of firms have reduced wages for all staff. Around 11 percent of firms have made more than 50 percent of their workforce redundant, and 53 percent have not made any redundancies.
The survey found that the most commonly applied mitigation measures by businesses were temporary closure at 69 percent. The survey showed that 35 percent to 69% of businesses have applied for the various relief programs available. Tshifhiwa Tshivhengwa, CEO of TBCSA said this was an unprecedented crisis for the tourism industry.
“Unless steps can be taken to support the industry, a major component of our economy will close down. Re-starting it will be a challenge.”
Blacky Khomani, the chairperson of TBCSA, said the current inability of businesses to cover costs is likely to lead to more business closures.
“Together with the cancellation of planned investments, this indicates a huge concern that there will be no supply when tourism moves towards recovery.
“Tourism is an important sector of our economy. We risk being unable to participate in what will be a competitive global industry when the recovery gains momentum,” said Khomani.
Adamou Labara, IFC’s Country Manager for South Africa said, “IFC recognises that tourism is an important sector for South Africa. The survey results show that it’s not only important to help businesses manage the crisis now, but to also work together to find solutions to help with recovery and job preservation."