The Fairmont Zimbali Resort on KwaZulu-Natal’s north coast. Picture: SUPPLIED
The Fairmont Zimbali Resort on KwaZulu-Natal’s north coast. Picture: SUPPLIED

The Covid-19 pandemic and the national lockdown imposed to help curb it have claimed yet another iconic victim, with the luxurious Fairmont Zimbali Resort going into business rescue.     

IFA Fair-Zim Hotel & Resort, owner of the luxury hotel near Ballito on KwaZulu-Natal’s north coast, announced on Thursday that it had entered into business rescue mainly because of the disruption to the local and global travel and tourism markets.

This was despite it having enjoyed “exponential growth”, with record turnover from November 2019 to March 2020 when the pandemic hit SA, according to GM Wayne Krambeck. 

The hotel was opened ahead of the 2010 World Cup in SA with a multibillion-dollar investment from the Kuwait-based IFA Hotels & Resorts.

The company’s announcement comes a day after President Cyril Ramaphosa announced that the country would move to a level 1 lockdown, which means most economic activity can resume.

Ramaphosa’s announcement that the country’s borders will be opened from October 1 is expected to be a major boost for the ailing tourism industry.

However, travel may be restricted to and from certain countries that are deemed to be high risk. A list of those countries will be published and based on the latest scientific data, the president said on Wednesday.

Travellers will only be able to use one of the land border posts that remained open during the lockdown or one of the three main airports: King Shaka International Airport in Durban, OR Tambo International Airport in Johannesburg, and Cape Town International Airport.

Ramaphosa said people entering SA will need to provide a negative Covid-19 test result not older than 72 hours. Those who do not will have to remain in mandatory quarantine at their own cost. All travellers will also be screened on arrival and those who display symptoms will be required to go into quarantine.

In preparation for the reopening of the borders, SA missions abroad will open for visa applications and all long-term visas will be reinstated.

But these interventions seem to have come too late for the Fairmont Zimbali Resort.

“The consequent stagnation in global economic activity together with the South African government-imposed national state of disaster has affected negatively on our business,” said Krambeck.

“We have been in support of our president and the government’s reasons for implementing the initial lockdown. However, the extraordinary circumstances of a prolonged lockdown, now in day 176, the longest in the world to date with limited support from government, has eroded our revenue base,” Krambeck said.

Tourism and aviation were some of the biggest casualties of the lockdown, threatening the future of businesses throughout the value chain. Tourism contributes an estimated 8.6% to GDP and supports about 1.5-million people.

SA Tourism CEO Sisa Ntshona said the sector had devised a recovery plan and it was projecting that to return to 2019 activity levels would take up to two-and-a-half years.

“The losses that will be incurred in a gradual return to normality, with ongoing uncertainty and the possible threat of further restrictions, are just not commercially viable. We have been left with no alternative but to apply for business rescue,” said Krambeck.

​The board resolved to file for business rescue and appoint Pierre Berrange as the business rescue practitioner. Business rescue entails the rehabilitation of a company that is financially distressed.

Krambeck said the business rescue practitioner would formulate a rescue plan and “ensure that the best way forward is found for all stakeholders in accordance with all regulatory requirements”.

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