Sun. Sep 20th, 2020

Tourism: 57% of accommodation owners forced to seek financial aid

A nationwide survey has been conducted to gauge just how badly the travel and tourism accommodation industry has been affected by COVID-19.

tourism 57 of accommodation owners forced to seek financial aid - Tourism: 57% of accommodation owners forced to seek financial aid

It’s no secret. COVID-19, together with the lockdown, has severely affected many businesses, including the travel and tourism industry. As a result, some businesses have been forced to seek some form of financial aid. 

As a leader in the travel accommodation industry, LekkeSlaap.co.za has conducted a nationwide survey of accommodation establishments to ascertain how the pandemic has impacted their financial performance and workforce. It received 4 488 contributions from accommodation business owners who represent 7 262 local accommodation establishments. 

BUSINESS OWNERS ASKED WHEN THEY THINK TOURISM WILL RETURN TO NORMAL

While accommodation bookings still remain low during the national lockdown, respondents were asked when they think tourism in their region will return to normal levels. A slight majority of business owners, 55.2%, expect business to get back to normal by or before Christmas, while the remainder is more pessimistic. 

At 68.9%, Limpopo recorded the highest number of respondents indicating an expectation of normal levels before the 2020 Christmas season, while the Free State, Eastern Cape, Mpumalanga and the North West reported over 60% expectation of normal levels within this time frame.

The data indicate that there remains a positive outlook for the 2020 calendar year despite extreme hardship.

One owner from Jeffreys Bay in the Eastern Cape said: “At the moment I feel as though I am in limbo and the future is uncertain.” 

Another owner in Modimolle in Limpopo commented that the uncertainty in the tourism industry directly results in a lack of any new bookings. 

“As a result of the uncertainty in the tourism industry, I have not had any new bookings for June/July or Sept to December. Usually, by now, I am fully booked. [sic]”

FINANCIAL IMPACT ON TOURISM INDUSTRY 

A 56.5% majority of businesses have been largely impacted and that the next few months will be a struggle. 27.6% indicated a high likelihood that their business will not survive, of which 3.9% said that their business would 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. 

“With Limpopo and Mpumalanga widely regarded to be the provinces with the most locally and internationally sought-after game viewing opportunities, these potential business failures could have a dramatic long-term impact on South Africa’s tourism economy, with noteworthy short-term economic difficulty already being visible in these results,” it said. 

Comparatively 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.

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FINANCIAL RELIEF 

A whopping 57% of local accommodation owners have been forced to seek financial aid due to the COVID-19 lockdown regulations. When asked about financial relief applications from banks, a total of 34.8% of respondents indicated that they have made these applications. The most applications were made in North West and KwaZulu-Natal, with 44% of respondents in both provinces indicating that they have applied. 

The lowest application rate was observed in the Western Cape, with 26.6% of respondents reporting applications. 

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