Magoebaskloof Hotel will not receive financial assistance from government due to B-BBEE.
“The court case is just another matter to me. My aim is to keep the business running so I can get my staff back,” said Deon Steyn, owner of Magoebaskloof Hotel, to Herald.
Steyn is one of many South Africans in the hospitality industry who does not qualify to receive Covid-19 financial relief from government due to B-BBEE (Broad-based Black Economic Empowerment) compliance. The hotel was used as an example in the media in a court application by Solidarity against the department of tourism. Only companies with B-BBEE compliance are considered for emergency funding. The high court ruled in favour of the department of tourism on basis that previously disadvantaged groups should be prioritised to enable transformation. The constitutional court then also dismissed an immediate appeal submitted by AfriForum and Solidarity.
Meanwhile Steyn has managed to obtain an essential service permit to operate during lockdown to accommodate essential service employees and to provide food deliveries. “It is not business as usual. Two single bookings is not enough income to deal with expenses such as paying the utilities (water and electricity),” he explained.
He said the hospitality industry is going through a double blow. “When the virus hit, before the president announced the lockdown, we were already under financial pressure because of all our reservations that were cancelled and we had to refund our clients,” he explained.
As a result of the lockdown, Steyn had to lay off most of his employees and he is concerned about the fate of his employees. “The hospitality industry is a big employer in the region. If businesses cannot be aided during this time, it will kill the industry,” he said.
He said he does not understand why accommodation premises cannot be phased into the lockdown regulations. “We are seeing people standing in long queues outside supermarkets where social distancing is not being respected.” He drew reference to the fact that guests can occupy every second room and through this distance themselves from other guests by at least seven meters (and a room between them). Food can be delivered to their rooms. “It is unfair to our industry but all we can do is hope for the best,” he said.
Minister of finance, Tito Mboweni, lives nearby and is a regular at the hotel. Recently. during a virtual fiance portfolio meeting, he alluded to the fact that he is frustrated with policies that prohibit access to funds to enterprises such as Magoebaskloof Hotel.
Steyn has been using his free time to do upgrades such as the bar and and hopes to kick start his business when lockdown eases. “I took ownership in July last year and has worked hard to restore the reputation of the hotel,” he said.
“The best way out of this, is to support each other after the lockdown. Local bookings can revive the industry,” Steyn concluded.
