SA tourism sector still in dangerous zone
THE South African industry welcomes the lifting of the alcohol ban and opening of interprovincial travel, but says it is still in critical condition.
The Tourism Business Council of South Africa (TBCSA) says although it welcomes the lifting of the liquor ban and the opening of Gauteng interprovincial travel, it believes there is still a long way to go before the sector is out of the ‘danger zone’.
“The fact that the bans are lifted does not mean we are going back to work as normal. We still know that we have some restrictions, we are still in a pandemic and the international markets are still not open to coming to South Africa.
So there’s still an uphill battle,” says TBCSA CEO Tshifhiwa Tshivhengwa.
He adds that the same applies to big resorts such as the Sun City, Airbnbs and the broader tourism industry as it will take some time to have enough people to sustain operations.
“The fact that we are open doesn’t mean that we are going to have an immediate uptake. The airlines will still have to wait for some time before they can build up to a capacity where they can start flying again so it’s going to take time.”
Tshivhengwa says the sector has tried to maintain jobs although many employees are not back to 100 percent of their salaries, and many are still working on weekends only.
“Until government travel, corporate travel and events come back, jobs are going to continue to be lost. The situation is fluid in terms of knowing exactly what’s going to happen, but we do hope that it improves so that we can get more people back at work. But we are still in a dangerous zone as far as this is concerned.”
Tshivhengwa says TBCSA still welcomes the adjustments, as it has been calling on government to provide some sort of relief to industries affected by lockdown restrictions.
“The new regulations that were announced by the president and subsequently being gazetted will definitely help in the recovery of domestic tourism. We have been calling as TBCSA for the removal of the ban on Gauteng interprovincial travel as well as the lifting of the ban on liquor. Those two things are offered, and we do believe that they will go a long way in ensuring that we return to some level of service.
The South African Liquor Brandowners Association (Salba) says it appreciates the partial lifting of the alcohol ban, including the three months deferment of about R2.5 billion worth of excise taxes payment it had applied for at the beginning of the latest ban.
Salba chair Sibani Mngadi: “The partial opening of sales as well as three months deferment in excise tax payments due on alcoholic beverages is a huge relief, but we are nowhere near being out of the woods, especially for the off-site consumption outlets that continue to be restricted to trading Monday to Thursday with no rationale or evidence provided for this decision, in spite of our many requests to secure this from government.
“Right now, our focus is on economic recovery, and the role our industry can play is critical,” says Mngadi.
Salba says the government’s prohibition measures in response to the Covid-19 pandemic have had devastating consequences. It lists a lack of justification for the prohibition, restrictions implemented with no warning and no consultation and poor empirical justification as having prevented legitimate businesses, supporting more than a million livelihoods across South Africa, from operating.
“These include businesses in the agriculture, tourism, hospitality and manufacturing sectors, and importantly, hundreds of thousands of SMEs,” Salba said in a statement.
Salba CEO Kurt Moore says the bans are harmful to both government and business revenue as 248 759 jobs are still at risk across the industry, equivalent to about 1.
59 percent of the national total of formal and informal employment for 2020.
The alcohol industry lost 161 days of trading between March 26 last year and July 25 this year due to the alcohol bans.
“Even before the cost of the looting to the alcohol industry is factored in, the four alcohol bans have already cost the country’s GDP an estimated R64.
8 billion or 1.3 percent of GDP,” says Moore.
Salba says the industry repeatedly warned and demonstrated via research that the bans had fuelled illegal activity, particularly among crime syndicates whose positions were significantly strengthened during prohibition. It says it will be difficult to reverse this as syndicates have become entrenched.
“Illicit trade has reached 22 percent (nearly a quarter) of total market volumes in South Africa – worth R20.5 billion in sales value. This has cost the fiscus R11.3 billion in tax revenues at a time when the country can least afford it,” says Moore.