SA’s hospitality sector needs domestic travel spend to survive fourth wave

The tourism and hospitality sector in Africa remains at half of what it was pre-pandemic, in 2019.

That’s according to the Federated Hospitality Association of South Africa (Fedhasa).

The United States had a substantial recovery of between 90% and 100% occupancies during the summer, while Europe lags with two-thirds occupancy levels over the same period.

According to STR – a data company that monitors the hotel industry worldwide – most markets are not back to 2019 levels, but those with a solid domestic leisure market are coming back fast.

“Stay open if you can because you’ll recover faster,” said STR managing director Robin Rossmann.

“There’s certainly pent-up demand for travel,” Rossmann said.

“However, we haven’t seen rate improvements in South Africa because international luxury tourism and business travel have not yet returned.”

Domestic leisure demand is crucial to the recovery of the hospitality sector.

While South Africa is one of the worst performing in Africa in terms of occupancy, there are green shoots in some of the provinces.

Areas with a robust domestic leisure market like KwaZulu-Natal and Limpopo have improved during the school holidays.

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While provinces like Gauteng and Western Cape are trading at 60% below what they would typically be.

But Rossmann points out that market conditions are changing rapidly, requiring business owners to revisit their thinking.

He also pointed to a faster recovery rate coming out of this downturn than the previous downturns.

“If we look at the luxury segment which underperformed last year, we see it outperforming in 2021. Luxury hotels in Dubai, for example, have revenues per available room [RevPAR] that are on average 70% higher than pre-Covid.”

For now, though, the country’s hospitality environment is still under immense pressure.

The focus is on local demand while waiting for international and corporate travel to make a meaningful recovery.

But that could take some time. South Africa remains on the red list for international travel from UK – a restriction costing the country billions.

According to the World Travel and Tourism Council, UK tourism has already cost South Africa R2.4 billion in lost revenue.

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The Department of Health has also warned of a fourth wave of infections expected for the festive period.

“Each South African has the power to ensure that the hospitality sector does not have to endure a fourth wave of shutdowns by complying with the stringent non-pharmaceutical protocols and getting vaccinated,” said Fedhasa chairperson Rosemary Anderson.

“If we consider that small businesses create jobs and that the tourism and hospitality sector puts food on the tables of one in every seven South Africans, we simply cannot have a repeat of last year’s summer season.

“That is our sincere hope as South Africa’s hospitality sector as the festive season approaches,” concluded Anderson.

Compiled by Narissa Subramoney