In a cruel twist, a record-breaking leap in confidence in services that include hotels and restaurants has been gutted by the series of controversial travel bans instituted by a host of countries, after SA scientists identified the Covid-19 Omicron variant.
The data from the Bureau for Economic Research (BER) released on Monday comes as the local hospitality sector has pleaded with the government to avoid harder lockdowns, in a bid to protect jobs and businesses as it now turns to local tourism to carry the all-important holiday season.
The industry lost more than R1bn in travel bookings for travel between December and March due to travel bans put in place during the 48 hours after Omicron was announced.
With the surging fourth wave of Covid-19 infections, driven by Omicron, the Federated Hospitality Association of SA (Fedhasa) has pleaded with government to “use all mechanisms other than lockdowns to keep pressure on the country’s healthcare system at a minimum.”
In a statement released on Monday Fedhasa chair Rosemary Anderson said the industry has asked tourism minister Lindiwe Sisulu to intervene, highlighting the extent to which the sector has suffered the collateral damage of lockdowns for the past 21 months.
“Our hospitality businesses simply cannot survive a repeat of last year December where beach bans, alcohol restrictions and extended curfews effectively shut us down,” Anderson said.
Given international travel bans, businesses are now reliant on domestic tourism over the festive season, and Fedhasa and other industry players are seeking alternatives to lockdown restrictions.
On top of tourism health and hygiene safety protocols instituted in 2020, the sector is suggesting, among other things, a reduction in the size of indoor gatherings, expanding curfew and prioritising vaccination of South Africans to mitigate the impact of the fourth wave.
The bans however appear to have shattered what was a resurgence in confidence in the hospitality sector.
The latest BER “other services” survey — a gauge of sentiment in hotels, restaurants, transport, real estate and business services that together account for about 22% of GDP — saw confidence leap in the fourth quarter driven by a more upbeat hospitality industry and bumper reservations received from local and international visitors.
Confidence leapt from 37 points in the third quarter, to 49 in the fourth quarter — the largest in the survey’s 16 year history — almost reaching the 50 point neutral mark according to a release from the BER on Monday.
The improvement was driven by a surge in hotels and restaurants where confidence rocketed from 11 to 58 points after bumper local and foreign visitor bookings.
But the fieldwork for the other services survey — which covers 350 firms and businesses — was conducted before local scientists went public with the identification of the new Covid-19 variant, on November 25.
A subsequent snap poll between December 6 and December 8 among those who responded in November showed that confidence in the hospitality sector more than halved the BER said.
It dropped from 58 to 25, similar to levels recorded in the second quarter, before the third Covid-19 wave and the July’s civil unrest.
“Instead of a better high season bringing the hospitality industry a reprieve after surviving 20 months of almost no travel, the international travel bans and the onset of the fourth Covid-19 wave locally have dealt the tourism industry a heavy blow,” the BER said in a statement.
“With this happening just before the start of the peak summer holiday season and the fact that the UK and Europe are major source markets for foreign tourists to SA, the travel bans could not have come at a worse time.”
The travel bans are likely to have reversed the increased hiring taking place in preparation for a good summer season, the BER said.
“This will have an immense adverse social impact amid record-high unemployment levels,” it said.
The country is facing record unemployment levels at almost 35% and the hospitality sector punches above its weight in terms of jobs. Though they account for about 1% of GDP, hotels and restaurants employed 557,000 people before the advent of Covid-19 in 2019, or about 3.4% of total employment according to the BER.
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