Cape Town could shed 90,000 tourism jobs due to Covid-19 crisis
Many businesses will not be able to survive an extended period of lockdown, with only 4% saying they had the resources to survive more than a year
More than 90,000 jobs in Cape Town’s tourism sector could be wiped out over six months as the effects of the Covid-19 pandemic continue to be felt, a new report by Cape Town Tourism, the city’s marketing body, said.
The tourism sector is one of the hardest hit after governments across the globe imposed stringent movement regulations in a bid to control the spread of the coronavirus.
In SA, the sector is a key foreign currency earner and jobs driver. According to the latest available figures from Statistics SA, tourism added about R118.4bn to SA’s economy in 2018, while contributing R18bn to Cape Town’s coffers. The sector is responsible for almost 740 000 jobs nationally and just more than 113,000 in Cape Town alone.
Cape Town Tourism, which markets the city’s tourism establishments, recently conducted a survey via e-mail among its members (of which 35% of respondents are accommodation providers, 29% are tour operators, 15% are attractions or activities, 7% are restaurants and the rest are made up of shops and shopping centres, transport operators, car rentals, conference venues, travel agents, language schools and wine estates).
The survey found that many businesses will not be able to survive an extended period of lockdown, with only 4% noting that they had the resources to survive more than a year.
Furthermore, 56% of businesses do not have a recovery plan in place. While many businesses have explored various relief options, some have noted that the vast amount of paperwork has deterred them, while others explained that they did not meet the requirements for relief they so desperately need, according to the survey.
There has been a significant effect on employees of tourism businesses as 36% of respondents mentioned that they are only able to provide partial pay to staff, 31% have staff on unpaid leave, and a further 18% have had to retrench workers.
A large majority of respondents expect the effect of the lockdown to last between four and 12 months.
About 83% of businesses indicated that they would not survive longer than six months under the current lockdown conditions.
“These results paint a grim picture of how tourism businesses are struggling as a result of Covid-19 lockdowns and travel restrictions,” said Enver Duminy, CEO of Cape Town Tourism.
“We see many tourism businesses coming to a standstill and fighting for survival due to extensive travel bans imposed by government as a measure to stop the spread of Covid-19.”
Duminy said that with continued lockdown and tourism being relegated to level 1 of the risk-adjusted strategy schedule, the closure of tourism businesses — including the significant shedding of jobs — would continue unabated, with at least 90,000 jobs on the line over the coming months.
“We implore government on all levels to consider working with tourism in applying our enhanced safety protocols to reduce health risks and upgrading local tourism to at least level 3, and domestic tourism at level 2 in the short term.”