Coronavirus gives tourism industry jitters as travel slowdown expected
As the SA economy is stuck in low gear, with weak GDP growth and pressure on consumers, the coronavirus outbreak could dampen growth in the hospitality industry.
With all eyes set on the spreading coronavirus, Covid19, the hospitality industry is bracing itself for a bumpy ride as travel and big events look set to slow down.
Hilton Worldwide Holdings CEO Christopher Nassetta said in February the outbreak could hurt the hospitality company’s full-year earnings.
This came after the group shut hundreds of hotels across China due to growing concerns about the virus.
Now, after the third case of coronavirus has been confirmed in SA, the local hospitality industry is on alert. “We have had a few cancellations, but these are not material at this stage,” says Sun International COO for hospitality Graham Wood.
The listed group is one of Africa’s largest tourism, leisure and gaming companies and its SA assets include Sun City Resort in North West and the Table Bay hotel in Cape Town.
“We are working with our partners in the group and with tour operators to rebook towards the end of the year when there will hopefully be more certainty. This is a difficult time for everyone, so we will be flexible,” Wood, who took over as COO on February 1, said.
Unathi Henama, a tourism lecturer at the Tshwane University of Technology, says the outbreak is likely to affect tourism arrivals in developing destinations such as SA.
Henama cited the drop in arrivals in SA when West Africa experienced the Ebola outbreak several years ago.
“African governments must ensure that detection measures are implemented at our various border posts and ports of entry,” he said.
“Tourism is very sensitive to the outbreak of disease, wars, natural disasters and election violence. It’s a priority sector that requires additional protection.
“The department of health must take citizens into confidence about the plans that it has to mitigate the threats posed by coronavirus, through health screening stations at ports of entry,” said Henama.
Flight Centre Travel Group Middle East and Africa MD
Andrew Stark said the company has seen a change in travel booking behaviour, “both in terms of the types of destinations and product and booking patterns”.
But Stark said SA is still popular, alongside Mauritius, Zanzibar and other warm-climate destinations.
In December 2019 4.6-million travellers passed through the borders of SA. They were made up of 1.47-million SA residents and 3.17-million foreign travellers, according to Stats SA.
“We have seen more requests and bookings for allinclusive types of travel and rand-friendly destinations. Typically what we’ve seen is that South Africans want to see all the costs upfront. It’s interesting to note that from an SA perspective, these trends are not solely due to the coronavirus but also to the weaker rand.”
The Australian Stock Exchange-listed Flight Centre is one of SA’s largest travel companies, with a total transaction value of more than R6.5bn and 121 retail outlets.
Stark says leisure travellers are willing to postpone their trips by a month or two while others have adopted a wait-andsee approach.
“Since January we have been contacting our customers to ensure they are informed and aware of their options. We always adhere with the recommendations of official sources, such as the World Health Organisation and the National Institute of Communicable Diseases (NICD), ensuring all our customers are equipped with accurate information at all times,” he said.
Listed hotels group City
Lodge says it has launched a coronavirus “protocol” across its 62 hotels to educate staff and guests about the disease outbreak.
“If we all act responsibly and follow the recommended protocol, we can minimise the risk. We have chosen to be proactive and caring in our approach so that our guests feel welcome and safe,” said City Lodge COO Lindiwe Sangweni-Siddo.