2 000 accommodation businesses to close their doors due to lockdown

About 28% of South African commercial accommodation providers may not survive the Covid-19 crisis.

This according to a recent survey conducted by local accommodation booking site LekkeSlaap.

LekkeSlaap marketing manager Gerriline Fouche said the three-month closure of the sector saw damage to the local tourism industry which directly impacted the commercial accommodation sector.

“We know that some of our establishments might not be able to open their doors again, and we know that many establishments will continue to struggle for the foreseeable future due to the financial damage suffered during the lockdown.”

She said the survey found that the Covid-19 pandemic profoundly impacted the South African travel accommodation industry, leaving uncertainty, financial difficulty and in many cases economic devastation.

A total of 4 488 responses were recorded during 19 – 28 May 2020, representing 7 262 guest houses, hotels and self-catering accommodation providers across the country.

The survey findings are as follows:

• A 56.5% majority of businesses were largely impacted and reported that the next few months will be a struggle.
• And 27.6% indicated a high likelihood that their businesses will not survive, of which 3.9% said their business would definitely not survive the pandemic.
• Limpopo (37.5%), North West (37.8%), Mpumalanga (33.5%) and the Northern Cape (34.2%) reported a particularly high chance of business failure.

The survey found that these potential business failures could have a dramatic long-term impact on South Africa’s tourism economy, with short-term economic difficulty already being visible in the sector.

• 82.6% of respondents reported that their businesses were stable before Covid-19, of which 49.8% indicated steady revenues compared to the previous year and 32.8% indicated that their businesses were thriving.
• Upcoming booking cancellations were recorded at 82% for the June/July season, 61% for September and 30% for the Christmas season nationwide.

Fourie said these figures suggested a devastating impact on revenues, with a dramatic effect still predicted for the third fiscal quarter.

• 78.1% of travel accommodation businesses reported instituting some form of temporary salary reductions, of which 24.7% reported significant temporary salary reductions and 31.8% reported their entire workforce on temporary zero pay.
• About 62% of respondents said they had not permanently retrenched any staff as a direct result of Covid-19.
• A minority of 20.7% of businesses said they have had to permanently retrench some staff as a direct result of Covid-19.

Although things were not looking good for the industry, Fouche said many anticipated recovery only towards the end of the year.

“Even though uncertainty seems to remain the only certainty for the near future, the majority of our respondents indicated that they believed we would see normal levels of tourism by this year’s Christmas season, demonstrating a positive outlook on the future of tourism despite our current difficulties.

“With these survey results, we can now offer a wealth of concrete data and evidence to aid all parties continuing to work tirelessly toward rebuilding the South African tourism industry.”

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