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CABO CITY: Lisa Krohn’s Ashanti Lodge in Cape Town, which is packed with backpackers from around the world, is now largely empty, a sign of how the pandemic has crushed South Africa’s tourism industry.
“This position is like a morgue,” he says, the abandoned lobby of the Victorian building.
After a five-month lock, South Africa is easiing internal restrictions, allowing hotels to reopen.With foreign borders still closed, the government is pining its hopes on domestic tourism, echoing a strategy attempt from Vietnam to New Zealand with combined results.
South Africa, however, remains one of the countries most affected by the pandemic. And as recession-ravaged consumers look at their wallets, many in the industry are expecting a battle.
“When your tourism industry is totally oriented towards foreign tourism, domestic tourism won’t make up for it,” said Olivier Ponti, vice president of ForwardKeys, who studies global trends. “It’s just impossible.”
Abundant wildlife, stunning scenery and renowned vineyards have made South Africa one of the world’s big long-haul travel destinations, establishing tourism as a pillar of the economy.
Last year it received more than 10 million foreign visitors. SA Tourism, the industry’s marketing agency, aims at an annual expansion of 8.7% of incoming arrivals by 2020, and overall tourism spending is expected to succeed at 273 billion rand (US$16 billion).
But COVID-19 stopped the sector when governments closed borders and imposed blockades.
“It’s not just a relief in revenue, it’s zero revenue,” said Lisa Goosen, executive director of Tintswalo, which operates high-end boutique hotels and cabins.
Of the tourism corporations that responded to a government survey, 64 cents were unable to pay their debts in May and 67 cents were unable to cover the ongoing costs. Many corporations have fired or cut wages. Others filed for bankruptcy.
SA Turismo says nearly 440,000 tourist jobs are in danger this year. The sector is expected to lose 75 percent of projected revenue and 80 billion rand of foreign revenue.
A LOST SEASON?
Now that South Africans are allowed to travel between provinces for the first time since March, tourism-focused businesses are turning to domestic consumers to stay afloat.
To keep the lights on, Ashanti Lodge in Krohn rented long-term rooms to locals who needed reasonable accommodation. From now on, hotels and guesthouses like yours rush to offer “city breaks”.
Tintswalo has reduced the costs of “home vacation” donations at homes such as Cape Town’s five-star hotels and upscale safaris in the past frequented by Americans and Europeans by 50 percent.
Restaurants on the city’s seafront remind staff outside of their holidays. Game reservations prepare camps.
The government says South Africans will be essential to revive the sector, starting with departures near the house and then with wider domestic tourism.
“A strong internal call will be key to functionality at the time of 2020,” SA Turismo wrote in a recently released stimulus package.
In an early indication of repressed demand, ForwardKeys analysts saw a 60% increase in domestic flight searches as the government eased restrictions.
But those volumes have still fallen by 80% to the same era last year, and existing economic difficulties are likely to mitigate any uptick in domestic travel.
By the time the pandemic occurred, South Africa was already in recession.The economy is expected to contract by 7.2% this year, and redundancies have added to the pre-COVID unemployment rate of 30%.
“We’re going to have a lot more unemployed, so there’s going to be a lot less income available,” said Enver Duminy, chief executive of Cape Town Tourism.
Local tourism was already declining. Nationals fell almost 14% year-on-year in 2018, and domestic tourists spend much less than foreigners.
“Only domestic travelers are sustainable for tourism,” said Tshifhiwa Tshivhengwa, executive director of South Africa’s Tourism Business Council. “We want foreign markets.”
When foreign visitors return, everyone guesses. Now is when they would normally book e-books for the high season from November to March, but it is not known when South Africa’s borders will reopen, and few expect a significant uptick in long-distance recreational activities when they do.
As the waves hit the rocks beneath Chapman’s Peak Road, Goosen said she was pleased that, despite everything, the Tintswalo hotel reopened to guests, wherever they come from.
“I think the season is lost. But at least we’ll keep working.”
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