Hotels feel business squeeze
PROSPECTS for the hospitality industry have been dimmed by a weak rand and poor economy.
Quarters Hotel, Florida Road, general manager Farhana Bhayat said she had to retrench staff after closing the Avondale hotel section in December.
Bhayat said the business had taken a knock after surviving the recession of 2008 and 2009. The building has now been leased to the Sharks Institute.
“How do you break news of retrenchment to loyal staff you have known for more than a decade? It was sad, but it had to be done to consolidate the business based on the state of our economy.
“We’re a privately owned hotel and have to withstand a turbulent economy. To stay afloat, we needed to cut costs. We have come down from 45 to 12 staff and outsourced our restaurant,” said Bhayat.
She said Florida Road businesses were booming a few years ago. There had since been a noticeable decline in occupancies.
“Most people do not have money to spend. We need to work twice as hard. To have to close after 17 years in the industry would be painful. Fortunately, we have loyal, regular clients. Five years ago, we had a 70 percent occupancy rate, but then things started to get rough,” she said.
Florida Park Hotel general manager John Childsmith said the local market had slumped and they were surviving because most of their clients were from abroad.
“When ships berth in the harbour, we get a lot of clients. But locals are feeling the pinch of the falling rand. We only get local support during holidays,” he said.
He warned hotels could expect further strain after the newly implemented “sugar tax” and 9.4 percent increase.
“We have a sick economy. Sometimes people order a platter and share the meal. Everything is going up. Although we are stable and not considering retrenching, we know others in the industry are feeling the pressure.
“If conditions do not improve, we might be forced to cut staff working hours,” he said, adding that his hotel employed 30 permanent staff and 10 casuals.
The Federated Hospitality Association of South Africa (Fedhasa) said that the hospitality industry throughout the country had been affected by the falling rand.
Fedhasa East Coast operations manager Charles Preece said: “Occupancies at hotels throughout the country have been hit. The rand weakness has a lesser effect on KZN because the province is known as a domestic tourist destination. Joburg and Cape Town are more likely to feel the pinch.”
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