Economy breathes welcome sigh for Level 1, while alcohol, travel industries remain aggrieved

17th September 2020 By: Marleny Arnoldi - Creamer Media Online Writer

Economy breathes welcome sigh for Level 1, while alcohol, travel industries remain aggrieved

With President Cyril Ramaphosa having announced the move to a Level 1 lockdown for South Africa, effective September 20, positive reactions have been streaming in from all spheres of the economy, but grievances around weekend alcohol sales, the curfew and only partially reopened borders remain.

Hospitality and entertainment group Sun International says the easing of restrictions is a long-awaited relief for the industry, particularly with leisure facilities being permitted to allow 50% of capacity and larger gatherings in outdoor and indoor venues.

The company can now start operating its entertainment and conferencing facilities, which is especially important for key properties such as The Palace, Sun City, Table Bay Hotel, the Maslow Sandton, Wild Coast Sun and The Boardwalk.

This while Airports Company South Africa is preparing to facilitate cross-border travel at the OR Tambo, King Shaka and Cape Town international airports.

However, travellers still need to adhere to Covid-19 safety measures, including presenting a negative Covid-19 test not older than 72 hours from time of departure, when arriving in South Africa.

Travellers will also be screened on arrival and those with symptoms will be required to be tested.

Where necessary, travellers will need to enter mandatory quarantine facilities at their own cost.

The President also requested travellers to download the Covid Alert application, so that contact tracing can be done if a positive case of the virus is confirmed.

The Association of Southern African Travel Agents (Asata) adds that travel agencies were among the first and hardest hit by the Covid-19 lockdown, and have been working around the clock to re-accommodate travellers and deal with rapidly changing airline and supplier policies.

“With the reopening of borders, travel agencies can now help uplift and strengthen other industries by providing companies, organisations and government with much-needed travel management services. Business travel remains a crucial element for any organisation wanting to grow and expand,” says Asata CEO Otto de Vries.

The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has wholly embraced the move to Level 1 lockdown, saying it will give struggling businesses in the metals and engineering industry much-needed momentum in their recovery efforts, after nearly six months of restrictions either to operate or import and export.

“The anticipated increase in export activity bodes well for export-oriented manufacturing, in line with the national industrial policy framework, as it will result in increased production activity and access to global markets, enabling businesses to ramp up their recovery,” says Seifsa chief economist Michael Ade.

Based on necessary Covid-19 precautionary measures such as physical distancing remaining in place longer, Seifsa has revised its growth forecast for the metals and engineering sector for 2020/21 from the initial 0.6% to -9.1%.

Business for South Africa, meanwhile, says the opening of all sectors of the economy, together will allowing cross-border travel, will be beneficial as the country moves to a “new normal”.

It stresses, however, that it is critically important to guard against a resurgent second wave of infections.

CONTINUED CONCERNS

Although South Africa’s alcohol industry welcomed the move to Level 1, it still has concerns about the continued restrictions in terms of when alcohol may be sold and the curfew restricting the sales of alcohol at licensed businesses.

Ramaphosa announced that the curfew would remain in place from midnight to 04:00, while alcohol for home consumption will be sold between 09:00 and 17:00, from Monday to Friday.

South African Liquor Brandowners Association CEO Kurt Moore says the extension of trading days to Friday for home consumption and two hours extension for on-site consumption to midnight is a step in the right direction, but not far enough for an industry that is still struggling to recover from two waves of bans on formal sales of alcohol during lockdown.

He adds that the limitations to weekend sales of alcohol for home consumption continue to provide an opportunity for the illicit networks to expand. The illicit alcohol market accounts for about 15% of alcohol sales by volume and results in a fiscal loss of R6.4-billion to the economy every year.

Despite the industry’s recovery challenges, it has committed an investment of R150-million into direct harm reduction interventions and programmes over the coming year to assist government in dealing with the health and social burden of alcohol misuse.

Meanwhile, South Africa’s hospitality and catering sector, represented by Federated Hospitality Association of Southern Africa (Fedhasa), stated concerns about partially opened borders from October 1.

“This all-important step to reopening our international borders will be the lifeline we need to start opening sustainably and help reignite the economy. However, the current trading levels are not sufficient to sustain the sector, since the hospitality sector has experienced hotel occupancies below 20% despite Level 2 ease of restrictions,” explains Fedhasa CEO Lee Zamekile Zama.

She adds that the 2020 occupancy levels in the hospitality industry are well below break-even for hotel trading. The next imminent step must be the full reopening of the country's borders to resume revenues from international travellers, Zama laments.

The Flight Centre Travel Group also has mixed feelings, explaining that airlines need months of notice before they put inventory on certain routes and before they resume full capacity.

“There are going to be many considerations and logistics involved when it comes to opening our international air space. My concern with regard to this was always that the longer we leave opening our borders, the longer it takes to get back up and running, meaning we are last in line with global airlines in terms of inventory and routes.

“South Africa is not a hub, but serves a really strong inbound focus. Flight Centre expects regional travel to Southern African Development Community countries and travel favourites such as Zanzibar, Mauritius, Zambia and similar to start to recover first,” says Flight Centre Middle East and Africa MD Andrew Stark.

He adds that having a “reopening date” gives airlines and industry a chance to get the wheels in motion, so that not only can we get inbound tourists into our country just in time for the peak December holiday season, but that South Africans can reconnect with loved ones globally.

Corporate Traveller, part of the Flight Centre group, echoes Stark’s sentiment, noting that there will be a patchwork of rules and regulations to consider at different destinations around the world.

“As much as we are opening our borders, the rest of the world might not readily accept South Africans yet."

Corporate Traveller has been creating resources to help customers get back on the road and in the air safely and with peace of mind, including the Traveller Information Hub and a series of Duty of Care videos.

Further, South Africa is Travel Ready believes there is no logical reason why borders cannot be fully reopened as long as risk mitigation measures for higher-risk source markets are implemented.

“Every day we have been closed to international travel, we have lost R336-million of spend and vital tax revenue,” says Tourism Business Council of South Africa CEO Tshifhiwa Tshivhengwa, believing that workable options can be developed in conjunction with infectious disease specialists and institutionalised into health protocols.

University of the Witwatersrand School of Governance social security systems chair Professor Alex van den Heever believes reopening in phases is not logical. He explains that all borders should be reopened as there are no additional risks posed by an industry that is well organised, has stringent health and hygiene safety protocols in place and operates in low-density settings.

Inbound travel will still only be at 30% of 2019 levels, but if uncertainty is created now, this will be far lower, he states.

Tourism consultant and specialist Gillian Saunders says that, if public health is the overriding criteria for reopening to certain source markets before others, South Africa will need to reopen to those with a similar pandemic profile, not countries where the rolling average of new cases per million of population is much higher than South Africa's.

“However, regardless of which source markets you decide to open up to in this phased approach, the reality is that we would still have 58-million South Africans circulating freely within the country compared with a small number of international tourists who will be subject to just the same health protocols as us. The risk is the same.”

Business for Ending Lockdown (BEL) agrees with the alcohol and hospitality industries’ concerns, adding that the new rules on gatherings leave room for confusion, impose complex logistical restrictions and remain prohibitive to religious and entertainment gatherings.

The President stated that 100 people may attend funerals, while 250 people may attend indoor gatherings and 500 people may attend outdoor gatherings – this while the number of people may not exceed 50% of the normal capacity of a venue, gym or recreational facility.

BEL also expressed concern about the curfew restricting freedom of movement and prohibiting nightlife activities, adding that the continuation of the state of disaster allows for arbitrary policy decisions that undermine investment certainty.