Helen Cloete has run the Eagle’s Nest Lodge in Fourways, Joburg, for years. But it’s been getting harder and harder to keep going — especially as the government, which pretty much closed down the industry during the lockdowns, has since gone Awol.
"Because of Covid, there is not much happening," she says. Though, she adds with some relief, "last week we had a family from the US".
Even before Covid, SA’s tourism industry was struggling, thanks to a brittle economy. Eagle’s Nest’s occupancy rate was about 50%-60% at the time. But after the pandemic hit, as flights were grounded and lockdowns bit, occupancy fell to zero.
As the lockdown eased in recent months, the occupancy rate squeaked up to 20%. That’s pretty much in line with SA’s hotels, which are running at 31.2% occupancy — half of the pre-pandemic rate.
But the problem is that prices have come down so much that hotels and lodges are earning, on average, 57% of what they did two years ago, which veteran tourism consultant Gillian Saunders describes as a "catastrophe".
Cloete says everyone is just hanging on by their fingernails. "You can’t sell now, you won’t get your price," she says. "I have a few people on a monthly basis. You can’t ask as much as you can on a daily basis, but every little bit helps."
Her experience resonates with other tourism operators the FM spoke to over the past few weeks.
Many have thrown in the towel. A survey conducted in October, before the second wave, found 28% of tourism companies had closed, 5% permanently.
And who can blame them? While tourist numbers plunged 72.6% last year — from 10.2-million people to just 2.8-million — there’s been a distinct sense that the industry has been hung out to dry.
Marc Wachsberger, MD of the Capital Hotel Group, which manages 12 hotels across SA, says it’s unacceptable that the industry has been left to fend for itself.
"The president promised as part of his original recovery plan there would at least be an e-visa portal, which would be operating by July 1 this year," he tells the FM. "We’re not even close, it’s all talk and no action."
It’s a common sentiment.
Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of SA, which represents the private sector, says the government has been talking about e-visas — which tourists can get over the internet — for three years, yet it has remained stillborn.
Instead, the government says the e-visa system "is expected to be available soon".
Tshivhengwa says the private sector is tired of plans that go nowhere — especially when the government then shoots the industry in the foot anyway.
"We can’t have stop-start scenarios where we close provincial travel, ban alcohol, close beaches and parks," he says. "There has to be certainty in the medium to long term on future restrictions. We cannot have tourists pay to access beaches and when they arrive we are closed."
It’s a cavalier way to treat SA’s second-largest economic sector, which contributed 8.6% (R425.8bn) to the country’s GDP and provided 1.5-million jobs in 2018. It also happened to be the engine room of small business, with 49,000 of them in this sector.
And this effect cascades down the line: for example, more than 12.5% of the cars made in SA were bought by car rental companies in 2018, while tourists made up 8% of the country’s retail sales. One in seven South Africans relied on the tourism industry to put food on their tables.
And yet, while the government dithers, firms that cater to tourists close every day.
During the third wave of the pandemic alone, 1,100 restaurants closed, according to the Restaurant Association. Casualties include top-rated outlets such as the Test Kitchen in Cape Town, Joburg’s Farro and Café 1999 in Durban.
Now, it is true that tourism has fallen off a cliff globally. If anything, SA’s performance is better than levels in Europe. But it doesn’t help that, unlike some countries, the government has done precious little to help struggling tourism firms survive.
In March 2020, after Covid hit, President Cyril Ramaphosa launched the Tourism Relief Fund to help lodges, safari outlets, car rental companies and other businesses making less than R5m a year. But hardly anyone qualified: of the 7,284 applications, only 4,000 got anything. And even then, relief was capped at R50,000.
That money has all gone. Instead, tourism minister Lindiwe Sisulu is punting a new tourism sector recovery plan as the path to salvation for an industry that, before Covid, was seen as one of the few bright hopes of the economy.
Sisulu is new to the post, having been shifted there from human settlements in Ramaphosa’s July cabinet reshuffle to replace Mmamoloko Kubayi, who did precious little in her portfolio.
But the move has been seen as something of a demotion due to Sisulu’s apparent flirtation with Ramaphosa’s opponents, the radical economic transformation faction of the ANC. That is hardly an encouraging sign that the government is serious about helping the tourism sector recover.
A vague wish list?
Responding to questions from the FM, Sisulu bristles at criticism from the industry that the "recovery plan" isn’t detailed enough.
"That is not correct," she says. "Together, these interventions and enablers will facilitate the preservation of R189bn of value, help the sector to recover to its 2019 output and employment levels by 2023, [and position it] for long-term sustainable growth."
She adds that "the implementation of the plan can reduce the impact of Covid on employment by 125,000 jobs".
Sisulu says the recovery plan is anchored on three pillars: rejuvenating the supply of tourism operators, re-igniting demand, and strengthening capacity.
The interventions include implementing biosecurity protocols to "rebuild traveller confidence", launching campaigns to stimulate domestic demand, a new global marketing programme, and a new "investment" plan to support operators.
But the industry is justifiably sceptical.
Tshivhengwa says not only is the recovery plan vague, but it also fails to meaningfully grapple with the fact that visitors have been deterred by the horror stories emerging from SA.
"The rioting and looting doesn’t help with SA’s brand image globally. People start to fear travelling to this country because they don’t know what will happen here. We need to reassure travellers of their safety while in our country."
Other critics ask what good a "recovery plan" will be if it doesn’t even address why low-hanging fruit, such as e-visas, haven’t been implemented after two years.
Another albatross around the industry’s neck is the lacklustre government-run National Public Transport Regulator, the sole entity responsible for dispensing vehicle licences for tour operators. Yet this regulator has ground to a halt — holding the entire industry hostage.
"We have companies that can’t get licences," says David Frost, CEO of industry body Satsa, which represents 1,350 inbound tour operators. "Big companies and small, young, black entrepreneurs are trying to get into the market, but through incompetence and intransigence the regulator is absolutely dysfunctional."
Before the government talks about recovery, says Frost, "let’s sort out things that haven’t worked".
This illustrates an essential fact: the pre-Covid success of SA’s tourism industry — the allure of the Big Five and the country’s beaches — has largely been in spite of the government rather than because of it. Policy interventions have only diminished the country’s attractiveness.
For instance, then home affairs minister Malusi Gigaba imposed a requirement in 2015 that visitors must bring unabridged birth certificates for children. This has since been scrapped, but it was a numbskull move in the first place that, according to the DA, cost SA R7.5bn in lost tourism revenue.
Equally, the Tourism Amendment Bill sought to regulate Airbnb — whose growth had outstripped traditional lodgings — but this was also seen as a turn-off for potential tourists.
It is this inability to even acknowledge the self-inflicted wounds that leaves the industry unconvinced the government really has its interests at heart.
And when Sisulu is asked by the FM about the delays in e-visas and the stalled regulator, for example, she avoids the question. Instead, she responds vaguely about how the government has identified "key enablers", which include "quicker turnaround times" in processing licences — without providing any deadlines.
"Tourism is fundamentally about people moving around, and this can be done safely under the globally benchmarked health and safety protocols that SA’s tourism industry has put in place," she says.
But what about funding? Many tourism firms were put on ice during the lockdown, and now don’t have the money to relaunch — how will that be addressed?
It’s an apposite question, since the tourism department had its budget dramatically cut last year, from R2.4bn to R1.4bn, as the National Treasury redirected funding to deal with the pandemic. SA Tourism, which is mandated to market the country abroad, also took an R826m hit.
Sisulu is mum on the effect of these cuts but says her department is relaunching several funds: a transformation fund, an equity fund, a green tourism incentive scheme, and a market fund to finance outbound tourism shows.
"We have secured additional support from the Treasury for phase two of the presidential job stimulus package," she says.
How any of that will work — or whether it will come with strings attached, like last year’s tourism "relief", for which only black-owned companies were eligible — is yet another question that remains unanswered.
Martin Wiest, Tourvest Destination Management CEO, says the industry needed far better financial support during the lockdown.
"You don’t want to lose material capacity in SA. We’ve had a gradual climb-out and expect, after February 2022, to see a substantial bounce-back," he says.
On August 4, the government at least rubber-stamped a "norms and standards" document for tourism — and Sisulu says vaccinations are central to this solution.
"The proportion of travellers vaccinated will be an indicator for tourism revival and the possibility of increased tourist numbers," she says.
But Sisulu’s vagueness on specific elements of the plan won’t inspire confidence in an industry in desperate need of it. Asked about the plans to mitigate the reputational damage of SA’s response to Covid, for example, she segues into a discussion of how SA has been "nominated to serve on the executive council of the UN World Tourism Organisation".
Nonetheless, some executives have faith in Sisulu.
Marcel von Aulock, CEO of SA’s largest hotel operator, Tsogo Sun, says Sisulu and international relations & co-operation minister Naledi Pandor have been lobbying hard to get SA taken off the UK’s "red list".
Marcel von Aulock, CEO of SA’s largest hotel operator, Tsogo Sun, says Sisulu and international relations & co-operation minister Naledi Pandor have been lobbying hard to get SA taken off the UK’s "red list".
"India is off the red list for the UK and we’re not. It’s about lobbying and trying to understand what their criteria are, but the tourism industry is so fragmented," he says.
The next step will be seeing if Sisulu can ensure there are no more self-inflicted wounds — like any sort of repeat of Gigaba’s unabridged birth certificate debacle.
"That was catastrophic — and then came Covid.
"That was a total disaster, then while we were coming out of the doldrums, the third wave and level four pushed us right back," says Von Aulock.
Herd immunity is fool’s gold
Part of the industry’s reservation about the recovery plan is that it’s heard all these soothing words before. Rather, it’s action that is needed now.
As Tshivhengwa puts it: "Not being fast enough and implementing [plans] is what’s [holding us back]. We need to be the first movers to gain a competitive advantage."
Wachsberger believes Ramaphosa’s office doesn’t seem to grasp the urgency of opening up the country, especially to those who have been double-vaccinated. This impression of a government that moves in geological time was only reinforced this weekend, when Ramaphosa failed to lift the ban on weekend alcohol sales.
Says Wachsberger: "If [tourists are] thinking of coming out, and there could be a lockdown or a booze ban or a beach ban, they would rather not book. Government needs to say that once … everyone who has wanted to get a vaccine has got one, assure people there will be no lockdown."
To delay until SA is close to "herd immunity", where more than 67% of the population is vaccinated, would be a mistake, he says.
"Herd immunity is an enigma," says Wachsberger. "We need someone from the government telling people that if they’re fully vaccinated, to get back to the office, to travel. Right now the big corporates are being too careful and it’s killing our industry."
You can’t keep the country locked down simply because some of the more pig-headed South Africans refuse to get vaccinated.
Tourvest’s Wiest says SA also needs to reconsider some of its other Covid rules. "We have not amended the rules to access our country, and still [require] the 72-hour PCR test while our core markets are over 60% fully vaccinated," he says.
But the silver lining is that things could recover faster than anyone expects.
"There’s a lot of pent-up demand and a lot of deferred bookings coming from the past two years," he says. "We don’t think this is a three-, four-or five-year game — we think it will take off sooner."
Jonathan Gadiah, CEO of tour operator Thompsons Africa, says those hotels that are open are averaging 50% occupancy — but some are entirely booked out. It’s a picture that will only be helped as the industry pushes workers to get vaccinated.
"The government is saying it may cancel the October holidays, but domestic tourism is taking off and shows we are au fait with protocols," says Gadiah. "It’s going smoothly: hotels know what to do. Now is the time for international visitors to come visit us."
SA Tourism’s "road to recovery report" in June noted that overnight trips by domestic tourists were 52% below the pre-Covid figures — which seems bad, until you consider the 80% fall in foreign tourism.
A mini-boom in domestic travel
Still, there’s been some rebound, and the figures show that while foreign travel has crashed, domestic travel is keeping the industry alive.
Lise Essberger, who owns the seven-unit Lethabo Estate in the Crocodile River Reserve, says she has never been busier.
"We’ve done better after the lockdown than before," she says. "We need to celebrate local culture. One of our biggest things is we’re eclectic and uniquely South African."
But while local tourists help, they’ll never bring in the sort of money that foreigners typically bring to Big Five reserves.
Robert More, who heads the More Family Collection of six safari lodges and three boutique hotels, says his lodges were about 60% full in August, largely thanks to domestic travellers.
"The challenge with relying on the domestic market is it’s seasonal, so numbers are coming off a bit as we move out of winter into summer. We’re forecasting to only generate 52% of our total 2019 accommodation turnover," he says.
Part of the problem is that South Africans typically pay about half what overseas visitors pay. "Safari trips are not seen as a bucket-list experience and therefore locals have a very clear price ceiling," he says.
This is why the ban on global travel has hurt the safari industry so badly, as the main source markets are the US, UK and Europe. More says there’s "a lot more uncertainty in those key source markets".
For other operators, the crunch has forced them to examine their business model and come up with new ideas.
Nita Payne is co-owner of StoryScape Travel, a tour operator that books holidays. When Covid bit, Payne hit on the idea of punting breakaways for women only. "It took off like wildfire," she says.
The options marketed to women travellers, mostly those over 40, include Big Five hikes in the Karoo, hikes in Mpumalanga, and a five-star retreat on the Cape Whale Coast. Next year they will offer a hiking expedition to the Albanian Alps.
Women-only travel is not a new concept internationally, she says. "Women want to travel in a safe group environment, yet it needs to be intimate and personal. For many it’s the first time they’re travelling alone, by choice or due to a life change like divorce or the loss of a loved one."
This illustrates that those operators who realised sooner that they were on their own, rather than waiting for the government’s recovery plan, have come out of this with fewer scars.
While Tshivhengwa says the government is dithering — delivering incoherent messages abroad and not doing enough to open up travel — the fact is that the private sector "can’t leave this in the hands of the government alone".
"We are working with other global private sector organisations to open travel to SA. Every day that SA is red-listed, we lose income and jobs, and that is not a desirable position," he says.
SA’s tourism industry has, to some extent, always fended for itself, and managed to keep its head above water. Until the government starts turning its soothing words into action, that’s unlikely to change.
Additional reporting by Natasha Marrian
Operators who have come through with fewer scars are the ones who realised quickest that they had to help themselves
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