Coronavirus | SA’s hotel industry ‘decimated’
South Africa’s hotel industry has been near-decimated by the spread of the coronavirus pandemic and resultant lockdown, according to Lee-Anne Bac, director for tourism and travel at accounting group BDO.
Before the pandemic, tourism accounted for over 1.2 million jobs in South Africa and contributed more than 8{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to economic activity.
But under lockdown regulations, tourism establishments fall under non-essential services, and the industry has been dealt heavy blows by travel restrictions as well as consumer concerns over the need to maintain physical distancing.
The lockdown will be downgraded to level 4 at the beginning of May, allowing some sectors to return to production under strict regulations. But tourism is categorized as one of the industries with the highest risk of transmission and restrictions will remain in place for in restaurants and hotels, sit-in restaurants and conference and convention centres, regardless of the lockdown level.
However, even before SA went into lockdown, average hotel occupancy had fallen to below its usual rate for the time of year. In March 2020, it was just 37{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}, compared to 68{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} in March 2019.
“SA’s first coronavirus case was reported on 5 March and lockdown started on 27 March. So, basically, SA should have had half a month of normal operations, but that does not seem to have been the case,” says Bac.
“I imagine April’s hotel occupancy rate will be pretty much zero since hotels are not allowed to operate unless they are offering ‘essential services’.”
Hotel occupancy rates in 2020 had been in line with normal trends in January at 57{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} and February at 68{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}, compared to the same months last year.
The end of ‘normal’
“February was the last of the tourism industry as we know it, and the last time we would have seen anything like ‘normal’ for a long time,” says Bac.
She foresees that, even once lockdown restrictions are lifted, it would be a while before people would start taking business trips, let alone leisure trips again. Business travellers usually make up the bulk of central city hotel occupancy.
“I believe we will see employees back-lashing and refusing to undertake business travel for a while or companies themselves will not allow business travel as it could be a risk to the company,” says Bac.
If the lockdown is extended much longer, she foresees a real bloodbath in the tourism industry – establishments closing, employees losing their jobs.
“There will be a huge slump around the world and each country will try to rebuild their own tourism industry. We won’t see many South Africans travelling out of the country nor foreigners coming here – apart from adventure travellers,” she says.
“Until our borders open and airlines fly again and there is a vaccine, people will rather do things locally in areas which are not crowded but allow them to get out of their homes. Our national parks will be attractive in this way and there might also be an opportunity for smaller towns to market themselves to city dwellers who were cooped up during lockdown.”
Operating during lockdown
Some industry members are nonetheless upbeat. Not all hotels closed once the lockdown started. Some had to remain open to service existing guests along with those from other establishments that were unable to travel home due to various reasons. One such hotel that stayed open is the Radisson Blu Hotel Waterfront, in Cape Town.
“Everyone who is here volunteered to stay here for the entire lockdown period, and they have gone above and beyond to ensure that guests are looked after during their stay,” says Nicol Carelse, guest relations manager at the hotel. “Overall, the mood is positive.”
Clinton Thom, general manager of the Radisson Blu Hotel Waterfront, says every precaution has been taken to ensure that guests are protected from the risk brought by Covid-19.
“We have strictly implemented health and safety measures as recommended by the World Health Organisation,” says Thom. “And while guests are free to walk around the hotel and treat it like their home, social distancing is practiced at all times.”
One guest, who has since returned home to Germany, noted that it was very tough to say goodbye as everyone in the hotel – employees and guests – had gotten to know one another and bonded like a family.
Changing standards
Some players have quickly adapted in a bid to meet changing client expectations. Marriott International, which owns South Africa’s Protea Hotels by Marriott, announced on Wednesday that it would be rolling out a multi-pronged platform over the next few months to elevate its cleanliness standards and hospitality norms and behaviours to meet the new health and safety challenges presented by the current pandemic environment.
Enhanced technologies will include electrostatic sprayers with hospital-grade disinfectant to sanitise surfaces throughout the hotel. In addition, the company is testing ultraviolet light technology for sanitising keys for guests and devices shared by associates.
In guest rooms, the company has likewise added to its rigorous protocols, requiring that all surfaces are thoroughly cleaned with hospital-grade disinfectants. Marriott will also be placing disinfecting wipes in each room for guests’ personal use.
In over 3 200 of Marriott’s hotels, guests can choose to use their phones to check in, access their rooms, make special requests and order room service that will be specially packaged and delivered right to the door without contact.
Lingering fears
But despite efforts, concerns linger for the industry. Fin24 reported on Wednesday that South Africa’s tourism industry will only be able to pay 5{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} of its staff at the end of May if the nationwide lockdown were to be extended, according to a leaked draft discussion document prepared by the office of the presidency. While some business restrictions are being lifted gradually as from 1 May, travel restrictions remain in place.
President Cyril Ramaphosa has announced plans to inject R500 billion into a social and economic support package to deal with the impact of the pandemic and lockdown. Early in April it was announced that the Department of Tourism has established a R200 million fund to help keep qualifying tourism businesses operational. The grants have been capped at R50 000 per business.