Tourism and hospitality sector still down 50% with no foreign visitors

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

That is according to the Federated Hospitality Association of South Africa (Fedhasa). The US had a substantial recovery of between 90% and 100% occupancies during its summer, while Europe lagged 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. 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 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 improved during school holidays.

But Gauteng and Western Cape are trading at 60% below what typically would be the case.

Rossmann said market conditions were changing rapidly, requiring business owners to revisit their thinking. He also pointed to a faster recovery rate from this downturn than the previous downturns.

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“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 on average 70% higher than pre-Covid.”

For now, though, SA’s hospitality environment is 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.

SA remains on the red list for international travel from the UK – a restriction costing the country billions. According to the World Travel and Tourism Council, it has already cost SA R2.4 billion in lost revenue.

The department of health has also warned of a fourth wave of infections in the festive period.

Federated Hospitality Association of SA chairperson Rosemary Anderson said: “Each South African has the power to ensure the hospitality sector does not have to endure a fourth wave of shutdowns by complying with protocols and getting vaccinated.”

– news@citizen.co.za