South Africa’s tourism sector may have already lost an estimated R54.2 billion in output in just three months as Covid-19 travel and leisure restrictions batter the industry.
These losses were recorded between mid-March and the end of May.
Furthermore, Tourism Minister Mmamoloko Kubayi-Ngubane has revealed that the sector now faces a potential 75% revenue reduction in 2020, putting a further R149.7 billion in output, 438 000 jobs and R80.2 billion in foreign receipts at risk.
Kubayi-Ngubane delivered her budget speech during a mini-plenary in the National Assembly on Wednesday.
“The United Nations Conference on Trade and Development (UNCTAD) has listed South Africa as one of the top 15 countries that are being the most negatively impacted by the near-closure of the international travel industry during the pandemic.
“Accordingly, UNCTAD predicts that tourism in South Africa is going to lose 3% in GDP contribution, and the loss of unskilled jobs in the sector could be as high as 12% if the virus is contained in the next 8 months,”” she said.
Kubayi-Ngubane said the government had supported businesses in distress through a R200-million loan guarantee scheme.
“I must reiterate, the implementation of the relief fund came under scrutiny and led to a court challenge due to the use of the government adopted policy of Broad Based Black Economic Empowerment.
Unfortunately, the noise of the naysayers confused and discouraged even those who qualified for the grant not to apply because they were being told that the relief was specifically for black people. This was not true. We have received many letters of appreciation from patriotic South Africans, black and white,” she said.
Mmamoloko Kubayi-Ngubane said her department is working with stakeholders to put together a recovery plan which will be submitted to cabinet in August.
“So far, the indications are that tourism recovery will experience a number of phases, from hyper-local community attractions, through to broader domestic tourism, regional land and air markets, and resumption of world-wide international travel.
“We envisage that phase one of interventions will primarily focus on the protection of the domestic supply side of the sector. In phase two, the emphasis will be on managing the reopening of the sector as tourism activities scale up. Phase three will target factors that can drive long term growth in tourism supply and demand,” she said.
Deputy Tourism Minister Fish Mahlalela said the Covid-19 pandemic had put South Africa on a “disenchanted path”.
“But despair and desperate measures should not be an option,” he said.
Mahlalela said businesses were fighting for survival, and that those once “destined for prosperity” were now on the brink of impoverishment because of Covid-19.
“It might be a winter of despair, but our recovery tale also speaks of a summer of hope,” he said.