According to Business Partners Ltd area manager, Renee Botha, hope is on the horizon for the countless SMEs that support the travel sector.
The South African tourism industry was among the hardest hit by the advent of the Covid-19 pandemic and ensuing lockdown restrictions.
Job losses, redundancies and pay cuts put hospitality and travel workers through a harrowing two-year ordeal.
Now, a few months after mandatory preventative measures were lifted, the opening of international and local borders has heralded the beginning of recovery for the sector and much-needed relief for small businesses along the value chain.
“With the banning of international flights, some tourism SMEs were able to redirect their focus from foreign travellers to the local market in time to recover some losses before the countrywide lockdown. Others were left completely debilitated and faced shutdown and financial ruin,” said Botha.
According to Stats SA, foreign arrivals dropped by over 70% in 2020, following a steady rise in international visitors to an average of 16.5 million in 2018 and 2019.
The accumulative effect was a dramatic loss of GDP, with the sector’s contribution falling by 50% and equating to billions of rands.
“The launch of National Tourism Month saw Minister Lindiwe Sisulu announcing that encouraging prospects lie ahead for the sector, with a 114% increase in domestic trips being reported during the first half of 2022 when compared to the same period in 2021.
“As Sisulu remarked, ‘This welcomed upsurge in domestic travel has exceeded the number of trips taken pre-pandemic by almost double’,” said Botha.
She urged existing and emerging entrepreneurs to never underestimate the potential of the domestic travel market and said that it’s important for tourism SMEs to conduct research in order to understand the unique needs and demands of local travellers.
“We know, for example, that domestic travellers spend an average of three nights at their destination. We also know that South Africans are currently very price-conscious, given several macro and micro-economic factors.
“The focus for local tourism SMEs should therefore be on adding and enhancing value by offering discounted packages on multiple nights, bundled deals on multiple locations and value-add offerings such as free meals or leisure activities,” said Botha.
Botha highlighted that with government’s renewed commitment to building a more inclusive, sustainable tourism sector, sights are now set on the thousands of tourism-focused businesses within the township economy, in rural areas and in outlying towns, many of whom have found compelling and creative ways to put their locations on the map.
“Small businesses in the tourism sector need to bear in mind that travel as we know it has been changed indelibly. Along with that change are new consumer demands and expectations.
“Capitalising on the upward trend in travel rests largely on understanding the new, post-pandemic traveller demographic,” she said.
Botha also said that with a large number of SMEs involved in the rush to recover market share, competition will be stiff.
“Setting your business apart will require a laser-focus on customer service and a return to fundamental principles such as implementing a seamless and hassle-free booking system, providing guests with a personalised level of service, rewarding loyalty and nurturing effective and attentive communication along every step of the feedback loop,” she said.