JERRY MABENA: SA tourism desperately needs a break
Government’s Tourism Equity Fund is but the first step to rescue an industry teetering on the brink
In early 2020 SA shut down. Businesses closed their doors, planes were grounded, and people became all too familiar with the inside of their homes. The country’s economy took a huge hit as a result of necessary lockdown measures, but the tourism sector has borne the brunt of the pandemic’s negative impact, losing billions of rand in revenue and more than 300,000 jobs since the outbreak.
While other sectors of the economy have shifted to adapt to the prevailing economic environment by implementing remote work and accelerating digital transformation, the nature of the tourism industry has made it difficult to respond to the challenges brought on by virus-induced travel restrictions. Simply put, no travellers means no tourism.
According to a 2020 report released by Stats SA, foreign arrivals dropped 71%, from just over 15.8-million in 2019 to fewer than 5-million in 2020. Saving the tourism sector and the livelihoods that depend on it will require both the public and private sectors to collaborate and inject more resources into the sector to avoid the worst-case scenario.
Collaborative reinvestment will reinvigorate the industry
SA needs to prioritise robust public-private partnerships to reignite the country’s tourism sector and ensure it can meaningfully contribute to the national economy once more.
The industry needs investment that will balance short- and long-term recovery, help spark innovation and enhance sustainability. The government has begun to take steps, such as the recent launch of the Tourism Equity Fund, where tourism minister Mmamoloko Kubayi-Ngubane announced that government would commit R1.2bn to sector over the next three years. But more needs to be done, given the country’s slow vaccination programme and the reality that the virus and its impact might be with us for many more years.
Rebuilding tourism must be a priority — ordinary South Africans have a part to play too. By travelling within the country and spending money at local travel and hospitality establishments, they can help save the industry. Domestic tourism is the key in the ignition that restarts the sector, helping mitigate the impact on jobs and businesses, and ensuring that the industry becomes more resilient.
Investing in the tourism sector now could redefine the industry for years to come. The world is starting to open up as more regions carry out their vaccination rollouts. Today, about half of all adults in the US have already been vaccinated and people are itching to travel — and they’re looking for more cost-effective destinations.
While SA remains on the UK’s red list — a key market for SA tourism — the good news is that cautious travel between the two countries is planned to resume within weeks; British Airways has announced that it will begin international travel this month.
Reopening international travel and accelerating SA’s vaccine rollout will enable the country to welcome the surge in international arrivals see as more people are vaccinated, generating greater revenue for the economy.
Tourism is more than an extra
The travel, tourism and hospitality industry is often seen as less important than, say, manufacturing or agriculture, but it is one of the largest employers and one of the biggest contributors to GDP.
In 2018 the direct contribution of the tourism sector to GDP was R130.1bn, comprising a direct contribution of almost 3% and about 4.5% of total employment in the country. More than 740,000 South Africans worked in the tourism industry in that year.
Additionally, the tourism’ value chain touches on almost every other sector of the economy. It has a mutually beneficial relationship with just about every sphere of economic activity in SA, from agriculture through to catering, logistics, car rentals, arts & craft and entertainment — even sport is part of the value chain. Given its importance, tourism requires special attention if the country is to rejuvenate and grow, save jobs and create more opportunities to get our people working.
While the SA economy is starting to rebound, it’s not enough to offset the losses sustained over the past year. In its 2021 World Economic Outlook the IMF forecast that SA’s annual growth rate will reach 3.1% for 2021, but given that the country’s economy contracted 7% during 2020 it will still find itself well behind its pre-Covid position.
The tourism industry has the greatest potential to stimulate growth and reduce the unemployment rate (now at 32.6%, a 13-year high). Breathing life back into the sector could boost national economic growth and see the country recover faster from the long-lasting impact of the pandemic.
The tourism industry is staring into the abyss. Rather than merely saving it, we need to revitalise it and save the jobs and livelihoods that are directly and indirectly linked to it.
• Mabena is CEO of Motsamayi Tourism Group.
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