A FEAR of impending widespread job losses has gripped South Africa’s hospitality industry as the government currently mulls the tightening of lockdown restrictions this festive season, due to rising Covid-19 infections.
A study conducted by the Bureau for Economic Research (BER) has shown that emergence of the more transmissible Omicron coronavirus variant has significantly hit business sentiment.
The BER yesterday said a snap poll early this month indicated that confidence in the hospitality sector more than halved due to international travel bans and the onset of the Covid-19 fourth wave.
Major source markets for foreign tourists to South Africa have implemented travel restrictions, after local scientists successfully sequenced the Omicron variant last month.
After the announcement, the tourism industry lost more than R1 billion bookings for travel between December and March 2022 overnight.
As a result, the BER said confidence in the hospitality industry dropped from 58 points to 25 points during the first week of December.
BER deputy director George Kershoff said the travel bans and the fourth wave had dealt the industry a heavy blow after surviving 20 months of almost no travel.
“The international travel bans and the rapid rise in new Covid-19 infections could not have come at a more inopportune time for the hospitality industry,” Kershoff said.
“At least to some degree, increased hiring in preparation for a good summer season has likely been reversed.
“This will have an immense adverse social impact amid record-high unemployment levels.”
President Cyril Ramaphosa tested positive for Covid-19 and did not address the nation on Sunday as was anticipated, after chairing a meeting of the National Coronavirus Command Council on Friday to chart the government’s response to rising Covid-19 cases.
Fedhasa, a national trade association for the hospitality industry, yesterday pleaded with the government to keep domestic tourism alive to save businesses and jobs.
Fedhasa chairperson Rosemary Anderson said they believed that there was no reason for additional lockdown restrictions to be implemented, as the Omicron variant did not appear to have translated into high levels of hospitalisation and death.
“Our hospitality businesses simply cannot survive a repeat of last December where beach bans, alcohol restrictions and extended curfews effectively shut us down,” Anderson said.
Foreign arrivals in South Africa dropped by 71 percent from just more than 15.8 million in 2019 to less than 5 million in 2020, as a result of the Covid-19 pandemic.
The National Accommodation Association of SA (Naa-sa) also said about 90 percent of small lodges and guest houses may soon have to shut their doors due to the number of booking cancellations.
Naa-sa chairperson Rosemarie van Staden said Omicron had brought a lot of uncertainty in the industry, while the Temporary Employment Relief Scheme (TERS) had not been forthcoming.
“A lot of guesthouses will not be able to carry on with business after this end of season,” Van Staden said.
“There is no government support at all. TERS hasn’t been paid out ever since and people are struggling.”
In 2019, the tourism industry contributed 3.7 percent to the gross domestic product or R209 billion to the national economy and directly employed 4.7 percent of the total workforce or about 773 500 people in the formal sector.
Momentum Investments economist Sanisha Packirisamy said the economic recovery experienced by some sectors had left the services sector behind.
“The economy has followed a K-shaped recovery, in which sectors that rely on face-to-face contact services, travel or large crowds are lagging in economic recovery, especially in entertainment, restaurants, tourism, and hospitality,” Packirisamy said.
siphelele.dludla@inl.co.za
BUSINESS REPORT ONLINE