Monday, January 24

The tourism sector lost R164 billion in visitor spending in 2020

South Africa’s tourism sector lost an estimated R164 billion in spending on domestic and inbound visitors to the country in 2020 due to the Covid-19 pandemic.

The Stellenbosch University Bureau of Economic Research (BER) said on Monday that the number of jobs supported by South Africa’s tourism industry decreased by 960,000 to 640,000 in 2020 from 1.6 million in 2018, as spending from Domestic and incoming visitors fell to R109. billion in 2020 from 273 billion rand in 2018.


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He based the estimated spending of domestic and inbound visitors on declining visitor rates and then applied it to 2018 tourism spending data, the most recent data available.

The bureau said that domestic tourism spending amounted to 273 billion rand in 2018, with domestic spending accounting for most of this spending at 56.1%.

Hear Suren Naidoo’s interview with Tsogo Sun Hotels CEO Marcel von Aulock in this properties module (or read the highlights here):

Through contagion effects to the rest of the economy, spending represented 7.2% or R385 billion of total GDP in 2018.

The BER further estimated that, based on tourism spending in 2020, the sector’s contribution to GDP declined to 2.9% in 2020 from 7.2% in 2018.

Collateral damage

The bureau based the knock-on effects of the loss in tourism spending on fewer travelers, resulting in lower spending from domestic and inbound visitors and thus a lower contribution to GDP and fewer jobs supported by the industry.

“The tourism sector is undoubtedly one of the industries most affected by the Covid-19 pandemic,” he said.

The BER said that the number of day trips in 2020 was reduced by 54% compared to 2019, while night trips were 40% lower.

He said day trips to date this year are still 43.1% below 2019 levels and overnight trips 25% less.

The bureau said South Africa received 10.2 million international visitors overnight in 2019, but this fell by 70% to 3.2 million in 2020, while the number of incoming visitors this year has remained low.

He said that 75% of foreign visitors to South Africa generally come from the Southern African Development Community (SADC).

“While it is minor since the start of the pandemic, most of our visitors still come from the SADC region,” he said.

Accommodation income is still way down

The BER said seasonally adjusted accommodation revenue was still down 74% in July 2021 compared to July 2019, with revenue in July this year 53% lower than June due to stricter closure regulations. and the riots in KwaZulu-Natal and Gauteng.

Average occupancy plummeted to 16% in July this year from 46.6% in 2019, it said.

The Executive Director of the Tourism Business Council, Tshifhiwa Tshivhengwa, said that the World Travel and Tourism Council estimated that a total of 470,000 jobs had been lost out of a total of 1.5 million in the sector.

Tshivhengwa said that the sector now has a situation where people go to work but are not paid their normal pre-Covid-19 salary because the sector has not returned to normal.

“Most of them work only during the weekend, because the demand is not that high and many places receive tourists only during the weekend,” he said.

Read: Tourism can still save thousands of jobs

Tshivhengwa added that some hotels have not yet reopened because it makes no business sense to open these hotels until government officials and companies are traveling again.

He said that almost no hotel had an average occupancy rate above 20% in 2020 and he believes occupancy rates currently remain around 30% on average because many hotels closed during closing in June this year, which would have impacted largely vacancy rates.

In addition, he said that leisure travel is insufficient to save the value chain and that conferences, exhibitions and sporting events are not being held, which means that fewer people are staying in different places.

Tshivhengwa said the hotel sector needs more people to get vaccinated, more restrictions to be relaxed and more freedom for the country’s citizens because this will result in more people traveling.

Critical air routes

He said air routes are critical to the recovery of the sector, particularly those with China and India.

“Those two countries present a great opportunity for South Africa, but we don’t have flights from those countries,” he said.

Tshivhengwa said South Africa has to work harder to get the country off the red list of many countries, restricting travel to South Africa.

Read: Tourism bosses want SA off UK travelers’ ‘red list’ this week [Sep 14]

He was not sure he could say without reservation that the worst of the impact of Covid-19 has already passed for the sector.

“Until such time as we can vaccinate as many people as possible and hopefully we won’t get any. [Covid-19] variants of concern, then we cannot say that the worst may have happened, ”he said.

Bad debts up to

Statistics from South Africa reported on Monday that the estimated number of total bad debts increased by 129.7% in the three months to the end of July 2021 compared to the corresponding period in 2020, and bad debts increased 157.7% year-on-year in July 2021.

Read: Iconic North Coast Fairmont Zimbali Hotel Enters Business Rescue

Data from Stats SA shows that there were a total of 286 mandatory and voluntary liquidations of closed companies and corporations in the commerce, catering and accommodation sector in the eight months to the end of August 2021 compared to 333 in the corresponding period in 2020 .

Looting and destruction

The national president of the Federated Hospitality Association of Southern Africa (Fedhasa), Rosemary Anderson, said that many tourism and hospitality companies simply could not hold out any longer as the winter took its toll further on local tourism, with the riots in KwaZulu- Natal and Gauteng. the coffin for many involved in the hospitality industry ”.

Anderson said that even if hospitality businesses were not directly negatively affected by the destruction and looting, consumers stopped going out during that turbulent week and several weeks afterward.

“The looting and destruction had a hugely negative effect on tourism and hospitality.

“It was as if a faucet had been turned off, and sadly many companies just couldn’t take it anymore,” he said.

However, Anderson said there is now reason for hope with warmer weather, the return of international airlines to South Africa, the improvement in the launch of the Covid-19 vaccine and the removal of travel bans against South Africa in countries. like the Netherlands, France and Germany. .

“All eyes are on the UK also this coming week, where hopefully in early October South Africa will be removed from the red list.”

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