Tourism hit by Covid-19

21st August 2020

By: Martin Zhuwakinyu

Creamer Media Senior Deputy Editor

     

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Tourism is an important economic sector in Africa, accounting for a sizeable chunk of the gross domestic product (GDP) of many countries. Mauritius’ tourism sector boasts the highest GDP contribution on the continent – a whopping 19% – followed by Morocco (12%), Egypt and Senegal (9% apiece), Kenya (8%) and South Africa (7%).

A few countries on other continents generate higher levels of their GDP from tourism. Most notable are Jamaica – where the figure is 31% – Croatia, Greece and Thailand, whose tourism sectors’ GDP contribution is 25%, 21% and 20% respectively.

But, given the havoc wrought by Covid-19 and efforts by governments to curb the spread of the pandemic, tourism’s revenue generation capacity has shrunk considerably. In Africa, the hardest-hit country in 2020 will be Kenya, according to a forecast by the United Nations Conference on Trade and Development and the World Travel and Tourism Council. These organisations foresee the East African country’s overall GDP declining by 5% this year as a result of a smaller contribution from tourism. The overall GDPs of Mauritius, Senegal, Egypt and South Africa are projected to be 3% lower.

These forecasts are based on a scenario in which one-third of yearly in-bound tourism expenditure is removed in each country.

Travel restrictions imposed by many governments across the world from March brought the international tourism industry to a halt, and the implications of these measures, according to industry watchers, include cumulative losses of $2.2-trillion, an 80% decline in profits, an estimated one-billion fewer travellers, and more than 100-million job losses.

The tourism industry’s Covid-19-induced woes have thrown associated industries, such as aviation, catering and car rentals, into a whirlpool of bankruptcy.

In Kenya, which has borne the brunt of Covid-19 containment measures, tourism operators had lost more than $750-million by the end of June, with 82% reporting they had put employees on unpaid leave, according to the country’s Tourism Ministry.

The Kenyan government lifted some domestic travel restrictions in early July, permitting people to travel around the country more freely. However, tourists from within Kenya account for a tiny proportion of the country’s tourism-derived revenue, prompting Kenya Tourism Board chairperson Jimi Kiriuki to quip: “Tourism, for us, is an export product, like tea or coffee.”

While international air travel to Kenya resumed at the beginning of this month, it’s unlikely that international tourists will start flocking to the country immediately, as travel restrictions remain firmly in place in European and Asian countries, which are key tourist sources. Concerns about the quality of healthcare available in the country have also been flagged as another potential deterrent to foreign tourists against visiting Kenya in large numbers, with some commentators forecasting that it could be years before bookings return to their pre-Covid-19 levels.

But what has been Covid-19’s impact on South African tourism?

In late June, the Tourism Business Council of South Africa (TBCSA) reported that, since the onset of the pandemic, the R270-billion sector, which anchors South Africa’s less-developed provinces, had lost R68-billion in revenue.

The impact has been felt beyond tourism, as the sector is intertwined with other sectors of the economy, including agriculture and vehicle manufacture – about 12% of South African-manufactured vehicles are bought by car rental businesses for use mostly by tourists.

Furniture manufacturers are also feeling the pinch, as it is unlikely that hotels and other tourism-related establishments will be placing big orders. Ditto the construction sector, as no hotel renovations are taking place.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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