North Coast restaurants call on government to do more

There has been a mixed reaction to the business relief package options for restaurants, bed and breakfasts and guest houses announced by KwaDukuza municipality last week.

The once-off special relief measures are aimed at bringing relief to businesses hard-hit in the tourism industry by the coronavirus lockdown.

The measures form part of the municipality’s 2020/21 budget.

Guest houses and B&Bs are offered one of two options:

Option 1 – 50% rates rebate for 6 months:

This package will only be for accommodation establishments in the Guest House and Bed and Breakfast industries who will continue to operate from July 1.

Option 2 – Re-classification/re-categorisation of the business establishment to residential:

The business owner must apply for the re-categorisation of the property to residential, in which case no short-term accommodation is expected and is required to remove all marketing material promoting the property as a Guest House or Bed and Breakfast accommodation.

The property will be used as a primary residence of the applicant and will not be left unoccupied.

Normal rates apply after 6 months. 

Restaurants are offered a rates rebate of 50% for 6 months and a 100% exemption on business licence renewal from July 1.

But restaurant owners are questioning whether this would help at all, due to many restaurants not owning the properties they operate on, meaning they still owed rent to landlords.

Al Pescatore restaurant owner Trevor Wolf said it would be more beneficial if a landlord could be forced by the municipality to pass the rebate to their tenant.

“If the rates rebate is permanent and does not need to be repaid, this will be even more beneficial,” he said.

Mozambik restaurant owner Brett Michielin, who rents the property he operates from, was unsure whether he would receive a rebate from his landlord.

Even so, this would not even cover half the salary of one employee.

“The only things which could make a difference would be if electricity was cut out, which we know will not happen. There is also the alcohol factor – without the sale of alcohol, we are losing countless Rands every day,” he said.

Michielin said the Mozambik group turnover had dropped from R20m in February to a meager R108 000 across all 17 branches nationwide in April, when all they could sell were frozen meals.

Through lockdown, running costs for the Ballito branch alone was R200 000 per month.

Local shopping centres have offered to credit restaurants operating on their premises should the municipality approve applications.

Welcoming the concession from the municipality, Ballito Lifestyle Centre co-owner Bruce Rencken said rebates would be credited directly to their tenants’ accounts.

“Every little bit will help and I am sure that the restaurants will be most grateful for any rebates from the municipality. It would translate into a monthly rebate of between R2 000 to R3 000 per restaurant, dependent on the size,” he said.

Howard Hulett, who operates Sea Dreams Guesthouse in Ballito, said the rates rebate would have little to no impact for him.

He said a 50% rates rebate would also not cover a single employee’s salary, and the option of temporarily reverting to residential status would kill his business.

“I rely on business travellers. Occupancy in May last year was 70% – this year it was 1.67%.”

He had to refund pre-bookings of R200000, causing a total loss for his guesthouse of about R400 000.

“What would help us in the industry is if government made a decision to allow inter-provincial travel. If we can open by August, we can expect bookings to come in for December.”

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