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Stricter Restrictions Could Decimate Tourism And Hospitality, Says FEDHASA

3rd Jun 2021 | Hospitality

With the third wave looming in South Africa, FEDHASA has said that the Government is faced with a delicate balancing act – restrictions to curb the spread of Covid-19 on one hand and the collateral damage of job and livelihood loss on the other. This once again puts the spotlight on responsible trade within the tourism and hospitality sectors as well as the general public’s adherence to health and safety protocols as set out by Government.

The statistics released yesterday, by Statistics South Africa regarding insolvencies and liquidations in the accommodation, food and beverage sector paint a gloomy picture. An increase of 78,6% was recorded for the three months ended April 2021, compared with the three months ended April 2020. The total number of liquidations increased by 55,3% in the first four months of 2021 compared with the first four months of 2020.

“The total number of liquidations in the hospitality sector in April 2021 was 158. However, the figure of 158 companies going into liquidation does not reflect the many more hospitality businesses that have closed down, but which did not formally follow the liquidation process, so the picture is likely much worse than these numbers indicate,” says Rosemary Anderson, Chairperson of FEDHASA.

“The hospitality industry was left broken by the first and second waves and many businesses are now so financially compromised that they are unable to hang on any longer, especially in light of a predicted third wave and resultant lockdown measures. Some hotels, which are wholly reliant on business and international tourism, have been closed for over a year now,” says Anderson.

Other related statistics indicate:

Measured in nominal terms (current prices), the total income for the tourist accommodation industry decreased by 45,3% in March 2021 compared with March 2020.
Income from accommodation decreased by 35,9% year-on-year in March 2021, the result of a 16,5% decrease in the number of stay unit nights sold and a 23,2% decrease in the average income per stay unit night sold.
Total income generated by the food and beverages industry decreased by 21,9% in the first quarter of 2021 when compared with the first quarter of 2020. The contributors to this decrease were: restaurants and coffee shops (-30,2% and contributing -16,2 percentage points) and catering services (-41,1% and contributing -5,6 percentage points).
“We emphasised in March that trading under strict compliance together with mass vaccination of South African citizens is the only solution in the industry’s fight against COVID-19 – and we still believe it to be the way forward,” says Anderson.

“FEDHASA has designed a robust set of health and safety protocols for COVID-19, and our members are acutely aware of the importance of adhering to these standards in order to safeguard the public and be able to continue trading. Despite the looming third wave, there is no sector as cognisant of the direct relationship between adherence to protocols and the recovery of the sector than the hospitality and tourism industry, “she concludes.

By: Hospitality Marketplace