The festive holiday season is around the corner, and after two years of Covid crippling the country’s hospitality and tourism industries, hopes were high for a strong bounce-back.
But alas, tourists may not be as free to travel as they had wished to be, not only because of financial strain but due to health hazards and lack of basic services in some provinces.
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This not only affects local tourists – many of which are not visiting KZN these holidays as they usually do, but international travellers too.
“There are many issues in most of our provinces which are deterring tourists from travelling to those tourist locations,” says Rosemary Anderson, national chairperson of Fedhasa (Federated Hospitality Association of Southern Africa).
“The very basics that one needs to attract tourism – particularly international tourism, are no raw sewerage entering rivers, dams or seas; a consistent supply of water and electricity; safe roads, and security.”
Tourists, she explains, very quickly see where they will be able to receive good basic bulk services and will choose to go to areas where they feel this is better provided.
“It is very unfair that after two years of our industry being so severely negatively affected during Covid, that we now have to contend with major obstacles which are deterring tourists from visiting us – reasons such as dangerous pot-hole filled roads, raw sewerage flowing into our precious water sources, lack of consistent supply of drinking water, and security issues.
“Many businesses in the tourism and hospitality industry will tell you that municipalities’ and Government’s failures to provide consistent safe bulk services, is the biggest obstacle to the sustainability of their businesses and the retention of their staff. The failure to provide basics is causing many hospitality businesses to become marginal.”
Anderson says the best way for Government to save and create jobs would be to ensure that professional consistent bulk services are provided right through our country.
“That way, businesses in our industry can get on with what they do best, build infrastructure, create businesses, and employ lots of people in this labour intensive industry.”
She adds: “If you asked businesses in tourism and hospitality what their biggest obstacle is for them to grow their business and employ more people, their answer would be the things Government and municipalities are not doing... Added to this is Government’s long-standing issue of the lack of a true eVisa system, unfriendly and unwelcoming treatment of many potential tourists wanting to visit South Africa, and other issues, all of these have been brought to the authorities’ attention repeatedly and over a significant length of time.”
International tourism into South Africa, she notes, could be a major salvation to addressing our massive unemployment problem.
Hotel establishments
John Loos, property sector strategist at FNB Commercial Property Finance, says the hotel sector’s revenue recovery made further progress in September 2022, but that these revenue figures are expected to continue to improve gradually as the year draws towards an end, with Covid-19 lockdown pressures long since having receded.
However, he states, surges in fuel prices earlier in 2022, as well as in overall inflation – driven mainly by fuel and food prices, along with rising interest rates and a slowing economy, have become “a more recent source of financial pressure on both business and consumers”.
“This, in turn, may have constrained the pace of recovery in demand for tourism trips of both a holiday and business nature, albeit it not stopping the recovery entirely...
“The coming December 2022 holiday season looks set to see improvement on December 2021, but may still be below the December 2019 level of occupancy rate and income, given the recent economic constraints mentioned above.”
Some leisure activities resuming
Echoing much of this, Joe Spring, head of Location and Commerce at Lightstone, says South Africans are returning to their pre Covid-19 leisure activities – but in some cases the recovery is uneven. Four out of the six categories that Lightstone assessed, regressed in the 12 months to June 2022. IN addition, none of the six leisure activities assessed – entertainment, holiday, recreational sport, stadium, airports and nightlife – had reached their 2019 levels.
“We have examined data from the vicinity of 35 000 different locations belonging to six broad un-geo-fenced location types related to what we do during our leisure time, and it shows that none of the six types had returned to 2019 levels.”
However, activity at airports (67% of 2019 levels) and stadia (90% of 2019 levels) had continued their recovery into 2022, while activity at entertainment venues, holiday accommodation, nightlife and recreational sport facilities had all dropped in 2022 after rallying in 2021, Spring says.
He also explains that the insights into the data sub-categories (see below) suggested people still preferred smaller outdoor establishments over larger indoor ones with B&B and camping sites recovering better than resorts and hotels.
“Likewise outdoor sports are preferred to indoor fitness and dance centres. Theatres, concert halls, zoos and aquariums remain the least recovered entertainment venues.”
Interestingly, Anderson says, the 4- and 5-star accommodation suppliers are experiencing higher occupancy rates than the lower-graded establishments. A number are reporting back to pre-Covid levels and some are exceeding it.
“The reason for this is thought to be that the increase in the cost of living is hitting middle to lower-income sectors more severely, where they now have less disposable income to spend on luxuries like a holiday. Those in higher income brackets are proportionately less negatively affected by the increase in the cost of living and still have sufficient disposable income to spend on 4- or 5-star accommodation.”
She says Cape Town – as a result of the city seeing good supply of basic bulk services, is reporting “very healthy occupancy levels”, as are rural country and bush establishments.
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