Western Cape tourism establishments are reeling as a result of the decision by the UK, US and some European countries to lock SA out of travel due to the Covid-19 Omicron variant.
Delivering the provincial medium-term budget policy statement on Monday, Western Cape finance & economic opportunities MEC David Maynier said a recent internal snap survey of more than 800 establishments in the region showed that cancellations were peaking. They are not expected to recover until well into the New Year.
Nearly 80% of businesses had cancellations from clients in December, which is traditionally the peak season, while 60% had cancellations from clients for January 2022. At least 32% of businesses reported cancellations from clients in February 2022.
“Worse, about 41% of businesses estimated that they lost more than R100,000 as a result of the travel bans,” Maynier said.
The province is one of SA’s economic powerhouses, contributing about 15% to SA’s GDP, while Gauteng contributes just more than a third. Before Covid-19 struck, the Western Cape counted tourism as one of the mainstays of the provincial economy, with the UK a key source market.
Local tourism industry players were banking on the traditional busy festive season period to fast-track the recovery of the sector after it was pushed to the brink of collapse as governments worldwide imposed stringent travel curbs for the better part of 2020 to curb the spread of Covid-19.
But the sector’s hopes for a faster recovery have been dashed by the controversial decision by some European countries and the US to ban flights and travellers from SA and most of the Southern African region due to the “variant of concern discovered in the region”.
Maynier ascribed the panic about the new variant to national government’s poor communication.
“We must, of course, be open, and we must be transparent, and we must share information about new variants, but the way that it was done was clumsy,” he said, referring to the media briefing to announce the detection of the variant.
“We should all support the call by the director-general of the World Health Organization, Tedros Ghebreyesus, on the need for a ‘new accord’ on sharing information on new variants. So that those who detect, sequence and report on new variants are not penalised like SA.”
Maynier called for the restrictions to be lifted immediately, saying they have little effect on curbing spread. He cited an article published last week by The Lancet, a peer-reviewed general medical journal, which states that by their nature Covid-19 variants are several steps ahead of the international travel curve. Once community transmission is occurring, travel bans have little effect.
“So, we say here and now to the international community: reverse your travel bans, which are ineffective, and which are killing jobs … Looking forward, we will work hard to reverse the travel bans, we will double down on destination marketing, we will provide regular business briefings, and we will fight to keep the economy open so that we save jobs in the Western Cape,” Maynier said.
On Monday, Cape Town mayor Geordin Hill-Lewis said the city’s tourism authorities had decided to relaunch the “Pocket-Friendly Campaign”, which runs until the end of February 2022, which will help counteract the abrupt international cancellations over the past two weeks.
“This will be done by offering our domestic travellers great discounts and lower fares to Cape Town through subsidies and vouchers across hotels, flights and experiences. This campaign will benefit the sector from SMME businesses such as independent local attractions, guest houses and B&B accommodation all the way to larger hotel chains that all need assistance over these challenging times,” Hill-Lewis said.
The Western Cape provincial government plans to spend R1.4bn over the medium term on the ease of doing business, boosting investment and exports, enterprise and skills development, as well as energy security amid concerns that load-shedding could further hurt economic recovery.
Maynier said the province will reprioritise and allocate an additional R211.3m to fight the Covid-19 pandemic in the Western Cape, including accelerating the vaccination drive. At least R800m in the provincial reserves has also been ring-fenced to support the fight against the pandemic.
The province expects to spend R75.8bn in 2022/2023, R73.4bn in 2023/2024 and R76.2bn in 2024/2025.
“However, our provincial equitable share, which makes up 75% of our provincial revenue, will take a R8.4bn knock in real terms because of below-inflation increases and record a net decrease of R540.5m over the medium term,” the MEC said.
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