As the third wave of Covid-19 infections looms over South Africa, the Federated Hospitality Association of South Africa (Fedhasa) says there is a “delicate balancing act” to be upheld as government is faced with addressing the pandemic through further restrictions, while ensuring those restrictions do “not contribute significantly towards the growing poverty pandemic”.
In a statement, Fedhasa explains that this challenge again highlights responsible trade within the tourism and hospitality sectors, as well as the general public’s adherence to health and safety protocols as set out by government.
Fedhasa is concerned about statistics released by Statistics South Africa (Stats SA) on May 27 regarding insolvencies and liquidations in the accommodation, and food and beverage sectors, and says these are “concerning” as it indicates how financially damaged the sector is.
It also does not bode well for the survival of the hospitality and tourism industry if there are further restrictions, states the association.
An increase in liquidations of 78.6% was recorded for the three months ended April, compared with the three months ended April 2020. The total number of liquidations increased by 55.3% in the first four months of this year compared with the first four months of 2020.
“The total number of liquidations in the hospitality sector in April was 158. However, the figure of 158 companies going into liquidation does not reflect the many more hospitality businesses that have closed down, but which did not formally follow the liquidation process, so the picture is likely much worse than these numbers indicate,” laments Fedhasa chairperson Rosemary Anderson.
She says the hospitality industry was “left broken” by the first and second waves and says that many businesses are now so financially compromised that they are unable to hang on any longer, especially in light of a predicted third wave and resultant likely lockdown measures.
Some hotels, which are wholly reliant on business and international tourism, have been closed for over a year now.
Other notable statistics from Stats SA include that, in nominal terms (current prices), the total income for the tourist accommodation industry decreased by 45.3% in March, compared with March 2020.
Income from accommodation decreased by 35.9% year-on-year in March, the result of a 16.5% decrease in the number of stay unit nights sold and a 23.2% decrease in the average income per stay unit night sold.
Total income generated by the food and beverages industry decreased by 21.9% in the first quarter of this year when compared with the first quarter of 2020.
“We emphasised in March that trading under strict compliance together with the mass vaccination of South African citizens is the only solution in the industry’s fight against Covid-19 – and we still believe it to be the way forward,” says Anderson.
Fedhasa has designed a robust set of health and safety protocols for Covid-19 and says that its members are “acutely aware” of the importance of adhering to these standards in order to safeguard the public and be able to continue trading.
“Despite the looming third wave, there is no sector as cognisant of the direct relationship between adherence to protocols and the recovery of the sector than the hospitality and tourism industry,” Anderson concludes.