In the three months that the tourism industry has been closed due to the state of containment, R68 billion in revenue has already been lost and more than 1.5 million people’s jobs have been lost in one of the most important industries of the economy.
The Tourism Business Council of South Africa (TBCSA) said in a statement on Tuesday that the state of restriction was destroying the tourism industry.
It is too central to the economy and employment that is allowed to collapse.
According to Statistics South Africa (SSA) figures for 2018, the tourism industry generates around R273 billion a year, which is 8.6% of gross domestic product (GDP).
The TBCSA warns it means the industry has been booming since March 27, when the state of restriction began, bleeding at R748m a day and 1.5m jobs at stake.
This comes at a time when general unemployment in the country for the first quarter of 2020 officially hit a new high of 30.1% on Tuesday, even before the effects of the Covid 19 pandemic.
Around 250,000 tourism industry employees have applied for Temporary Relief from the Unemployment Insurance Fund (UIF) Covid-19Ters scheme for April and May.
The TBCSA warns that this figure is likely to be double for June.
The TBCSA reckons some 49,000 small businesses in the tourism industry have already been affected by the restriction and are facing bankruptcy.
Jobs could be “permanently lost” if the industry is not allowed to reopen, the TBCSA believes.
He therefore made a presentation to Mmamoloko Kubayi-Ngubane, Minister of Tourism, as well as to Pres. Cyril Ramaphosa for the urgent reopening of the industry.
The TBCSA reckons that if the industry does not reopen by September at the latest, it will be too late.
From September to March, the industry generates 60% of its income from international holidaymakers who come to the country during the summer months and South Africans who go on holiday.
Reopening of residences
Ramaphosa’s announcement last Wednesday that residences may again operate under strict security measures is a step in the right direction, the TBCSA reckons. However, it does not mean anything if the national borders as well as the provincial borders remain closed.
“Without interprovincial travel, accommodation businesses will simply remain closed and jobs will be permanently lost.”
According to the SSA, 60% of all local overnight trips are across provincial borders.
“If interprovincial travel is not allowed, it will make the president’s announcement that the accommodation industry can do business again to support economic activities and save businesses and people’s jobs,” says CEO Tshifhiwa Tshivhengwa of the TBCSA.
“Without 90% of the market, about 60% of which travel across provincial borders, there will be no demand for services and businesses will not be able to trade, even at cost.”
The Department of Tourism already expects between 550,000 and 600,000 jobs in the hotel industry to be lost due to the state of restriction.
The TBCSA also insults the ban on liquor sales in restaurants that may now reopen.
The body says between 35% and 50% of restaurants’ income comes from the sale of alcohol and many do business on weekends when alcohol is not allowed to be sold at all.
“These regulations will need to be amended to allow the sale of beverages in restaurants so that they can open and survive,” Tshivhengwa said.
The TBCSA said in an interview during the weekend that the tourism minister said about 30% of the country’s restaurants had to be closed permanently.
The body believes that safeguards could be applied instead so that the entire tourism industry can fully reopen and believes that it will be sufficient to prevent the spread of the coronavirus.
“The overall survival of the industry now depends on the relaxation of the regulations,” says the TBCSA.