Rob Rose Editor: Financial Mail
Wine bottles. Picture DARIO LO PRESTI/123RF
Wine bottles. Picture DARIO LO PRESTI/123RF

Can the pandemic have ravaged the tourism sector so comprehensively that the Vineyard, ranked by The Telegraph as one of the top 10 hotels in Cape Town, is on the verge of being liquidated?

Well, no, not really.

It’s unfortunate that the Vineyard, built in 1800 for Scottish writer and artist Lady Ann Barnard and her bureaucrat husband Andrew, has been dragged into a public spat at the precise time that Covid-19 is causing the tourism sector to implode. (The hotel, famously, is in the area where Jan van Riebeeck planted the first vines in SA in 1658.)

But the reality is that the Vineyard isn’t about to go bust any time soon.

Yesterday the Sunday Times reported that one of the Vineyard’s suppliers, Alan Lyons’s OnShelf Investment Five, is lodging an application with the Cape High Court to liquidate the hotel over a R159,678 debt. The case is due to be heard on December 4.

Lyons says in an affidavit: “It is common knowledge that the nationwide lockdown has had a crippling economic effect on the hospitality industry, and [my company] believes this is the reason [the hotel] remains unable to pay the balance of the rental due.”

Now, it is manifestly true that the lockdown has hurt the liquidity of all hotels.

But Vineyard finance director Hilary Seymour told the FM yesterday that it’s not a question of anyone being “unable to pay”; rather, it’s a matter of a standard commercial dispute.

“That company was the landlord of the place we rented to store our excess furniture. We believe it charged us twice, and the company disputes this. It’s nothing more, nothing less,” he says.

It always seemed unlikely that the Vineyard, a hotel set on prime seven acres of land in Newlands, on the banks of the Liesbeek River, would be felled by a R159,678 debt. This especially since the property is worth a few hundred million, according to Seymour. Moreover, the amount in dispute could easily be raised in just one night, were the Vineyard to fill just a third of its 211 rooms.

This is why Seymour says this case ought to be struck off the court roll.

“It should never have got to this. I don’t understand why the company took this route — maybe to put pressure on us,” he says.

But while the Vineyard hasn’t run out of cash, it isn’t exactly in rude health — few hotels could make that claim after the lockdown.

“We’re coping,” says Seymour. “I don’t think anyone in the hospitality industry can say much more than that. But we are getting bookings, and we’re hoping the government relaxes the rules soon to allow for a proper holiday season.”

The Vineyard is luckier than most. From November 17 it will host the first visiting sports team to arrive in SA since Covid-19 hit: the English cricket team, here to play six one-day and T20 games against the Proteas. The tourists will observe a 10-day quarantine at the hotel before the first match, scheduled for November 27 at Newlands.

Nonetheless, Lyons is entirely right to say that Covid-19, and the lockdown, has caused immense damage to the wider tourism industry.

In an article written by Tourism Business Council CEO Tshifhiwa Tshivhengwa and Cullinan Holdings CEO Michael Tollman this weekend they say the industry has already lost more than R100bn in tourism spend since the lockdown began in March.

“Earlier this year we rang the alarm on the 600,000 tourism jobs that would be lost in 2020 due to Covid-19,” they say.

But the problem is that the government’s actions have only made it worse.

Two weeks ago it “red-listed” 22 countries whose citizens won’t be allowed to travel to SA right now. Well, actually, those people are allowed to travel to SA, if it’s for business — it’s just that leisure tourists won’t be allowed. (Read the full list on Business Insider.)

The industry believes this makes zero sense and will do even more damage to an industry on its knees, according to this article in Moneyweb.

“The inclusion of Germany and Canada means that leisure tourists from eight of SA’s top 10 international tourist source markets are now effectively banned from travelling to the country’s shores,” writes journalist Suren Naidoo.

Southern Africa Tourism Services Association CEO David Frost describes the “red listing” of some countries as “muddled thinking”.

A far better option, Frost told the Sunday Times this week, is to open to everyone but require tourists to produce a Covid-19 certificate less than 72-hours old. These tourists should be “pre-screened before they arrive, traced [with an app] from the moment they arrive … and their entire tourism experience [should be] managed through a series of protocols”.

In other words, the binary option of bluntly refusing people entry should give way to a more nuanced approach, in which the travellers should be required to prove they’re not Covid-19 positive and then follow the convention on masks and social distancing.

Says Frost: “When there’s chopping and changing like this, tourists just write us off for the next two or three years. Germany was originally allowed, and two weeks later it wasn’t.”

For SA, which gets only 2,6m overseas visitors a year — rather than the 32m of Thailand, or the 9,8m of Australia — this sort of blanket ban isn’t helpful.

Nor is it good news for five-star hotels that rely on overseas tourists, like the Vineyard, whose guests are typically evenly split between locals and foreigners.

“We’re waiting with bated breath to see what the government decides,” says Seymour.

“But if someone gets a Covid-19 test before arriving, and the protocols are quite strict, why not let that happen? Already we’re not expecting tourism to recover to what it was for the next two or three years. So why be so inflexible and make it worse for everyone?”​

This is a roundup of the best Covid-19 news from the web, brought to you in today’s FM lockdown newsletter.

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