SA tourism bookings crash and burn
The financial shock hitting SA’s hotel and self-catering accommodation spots could last for the rest of the year
Umhlanga, Hermanus and Plettenberg Bay, usually bustling with holidaymakers during the peak Easter school break, are all but deserted. In these and other coastal hotspots, bookings worth millions of rands have been cancelled in the wake of the Covid-19 lockdown leaving letting agents, Airbnb hosts and hoteliers out of pocket.
And there are fears that travel plans for the June/July and December periods will also be scrapped, given that many South Africans may no longer be able to afford a holiday this year.
Leigh Mulholland, manager for letting agency Seeff ShortStay, estimates that in Cape Town alone, more than 17,000 short-term rental properties are standing empty (including Airbnb rooms and apartments, but excluding hotel rooms).
"That translates into millions of rands of lost revenue to the self-catering sector of the tourist market," she says.
Mulholland confirms that 100% of Seeff ShortStay’s rental bookings of around 500 properties across SA for the Easter and midyear holiday seasons have been cancelled. She adds: "There have been no re-bookings as yet. I believe that the outlook for tourism will be bleak for most of this year because it’s not just SA that is affected by Covid-19, but a large portion of our visitors from elsewhere in the world, especially from Europe and the US."
At Zimbali on KwaZulu Natal’s north coast, one of SA’s poshest golf and beach resorts, the 200-odd homes typically let over the Easter school holidays have also been shuttered. Andreas Wassenaar, licensee for Seeff Zimbali, says Easter bookings are usually for seven days at an average R4,000 a day, which translates into lost revenue of about R5.6m. "That’s just for Zimbali. The loss for the greater Ballito market will be much larger."
Says Wassenaar: "This is a devastating shock for the hospitality and tourism industry across our region and has a direct and immediate impact on property owners, who often rely on high-demand periods to finance running expenses of their properties."
But it’s not just Easter and June/July holiday bookings that have been cancelled. Cisca de Vries, Seeff ShortStay rental agent for Hermanus, says she’s already had a number of December cancellations. Many South Africans will be forced to stay home this festive season given the expected financial impact of Covid-19.
SA’s hotel industry will also suffer millions in lockdown-induced revenue losses. Cape Town, with a total graded hotel-room tally of about 13,000, will be hardest hit, given the closure of SA’s borders to international tourists. The Mother City coincidentally posted a noticeable uptick in occupancy over the past six to 12 months, on the back of a revival in tourism following 2018’s drought-linked slump.
Latest figures from global hospitality data and analytics specialist STR show that the average hotel occupancy in SA plummeted to an average 43.5% in March (year-on-year). That’s down from February’s multiyear high of 68%. Similarly, revenue per available room, another key performance metric tracked by STR, dropped by 42.3% to R608.08. That compares to February’s average room rate of close to R1,000.
The hotel industry’s losses are expected to be far more pronounced in April, given that the government’s 21-day lockdown of nonessential businesses kicked in only at midnight on March 26.
As Robert Hodson, group marketing manager for Legacy Hotels & Resorts, puts it: "All our hotels and timeshare resorts are shut down. So there is now zero occupancy and zero revenue."
The group owns more than 20 hotels and timeshare resorts across SA including the Michelangelo Hotel in Sandton, The Portswood Hotel at Cape Town’s V&A Waterfront and Kwa Maritane Bush Lodge in the Pilanesberg.
The concern, Hodson says, is that no-one knows how long the lockdown could last if it is extended beyond three weeks. And even if SA opens for business again on April 17, hotel bookings are unlikely to recover overnight.
"We expect new bookings to be exceptionally slow until the domestic market starts travelling again," he says.
Hodson expects it will take a "helluva" lot longer for international travellers to return to SA’s shores. "The only positive right now is that SA is hosting a number of international sporting events next year, including the Lions rugby tour, which could support a recovery in international leisure tourists."
Meanwhile, it seems most holidaymakers forced to cancel bookings for the Easter school period will be refunded. Airbnb, for instance, is offering 100% travel credits or cash refunds for bookings made for March 14 to May 31. Hosts, too, will be reimbursed by Airbnb for service fees. The tourism department has also made available a one-off, capped grant via its Tourism Relief Fund to help subsidise the operating expenses of small businesses during the lockdown.
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