Pre-Covid glory days: SA tourism gearing up for foreign travellers

As South Africa tourism prepares to get off its knees after struggling through the Covid pandemic, economists say the industry needs the government’s help to return the country to its 2019 glory days, as it strives to rebuild its brand as a tourism destination.

According to economist Chris Hart, the “hardest-hit sector” was the first to experience the results of alcohol bans, travel restrictions, and many other regulations.

It was also the last to recover, as it was barely compensated for the costs resulting from the regulations.

“Even in the budget, the announcement of loans to kick-start small investments [Tourism Equity Fund] is really meaningless and too complicated and difficult to access,” he added.

“They tried during Covid and it wasn’t accessible – and there is no doubt that it will be very hard again because of the steep requirements, which make it very difficult for small businesses to actually operate, and also for job creation.”

As part of South Africa’s Economic Reconstruction and Recovery Plan, the equity fund was created to drive transformation through advancing equitable opportunities to ensure inclusive economic growth in the tourism sector.

According to the department of tourism, the fund was intended to help commercially viable and sustainable majority black-owned (minimum 51%) tourism enterprises – including those in rural areas and townships – in order to promote alleviation of poverty, inequality and growth of black-controlled tourism enterprises.

It was also intended:

• to de-risk the funding provided to tourism enterprises through patient capital that will ease the debt repayment ability of black-controlled enterprises; and
• to facilitate the participation of targeted groups such as women and youth in the priority tourism sectors as defined by the Amended Tourism B-BBEE (broad-based black economic empowerment) sector codes.

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Mike Schussler of Economists.co.za said 2.7% of the country’s gross domestic product was made up of foreign tourism spend in 2018-19, which proved the industry needed international visitors to recover and reach its pre-pandemic level.

However, it also needed major financial assistance from the government.

“I felt the industry should have had a cash injection from the government, but the government is playing politics.

“There’s no doubt about it whatsoever, this would create quite a few jobs in that industry,” he said.

Schussler said financial assistance should be part of the recovery plan.

“I don’t know how government will do it, now that they’ve got to concentrate more on the marketing,” he added.

Federated Hospitality Association of SA’s national chair, Rosemary Anderson, said President Cyril Ramaphosa’s announcement lifting restrictions on inbound tourism was a relief for hospitality businesses, which were fighting to rebuild, preserve jobs and contribute to the economy.

“Mass unemployment is one of the biggest problems facing South Africa and our sector holds the key to economic growth and job creation,” Anderson said.