Tourism losses are staggering
SHOCK: R3.8BN IN 2 MONTHS – APRIL AND MAY
Impact on tax revenue and employment equally devastating.
It comes as no surprise that Statistics SA’s survey of tourism accommodation covering April and May found the number of bed nights sold fell to just about zero: tourism has effectively been outlawed since the last week of March.
However, the monetary value of lost revenue is astounding. According to the report, income generated by hotels, guest houses and B&B establishments fell by nearly 99%. Nearly R3.8 billion in revenue was lost in only two months.
The report shows that in April revenue from bed nights sold fell from R1.99 billion a year ago to just R37.9 million. In May it fell from R1.75 billion last year to R26.8 million this year.
Statistics SA comes to the obvious conclusion in its report that: “The Covid-19 pandemic and lockdown regulations since 27 March have had an extensive impact on economic activity. Measured in nominal terms, total income for the tourist accommodation industry decreased by 98% in May 2020 compared with May 2019.
“Income from accommodation decreased by 98.5% year-on-year in May 2020, the result of a 98% decrease in the number of stay unit nights sold and a 24.2% decrease in the average income per stay unit night sold,” say the researchers.
Problems had already begun in March, probably due to a decline in the number of foreign tourists visiting SA.
Figures show that bookings declined 39% as measured by bed nights sold and income from accommodation was already nearly 42% lower than in March 2019.
Occupancy rates in any type of accommodation, from hotels to guest houses, fell to 1%. Occupancy levels in caravan parks and camping sites fell to zero as national parks, private reserves and resorts were closed at the end of March.
The total loss of revenue in the three months from March to May exceeds R4.6 billion compared with the same three months last year. It does not take a doctorate in mathematics or statistics to forecast that income for June and July will probably also be close to 100% lower than usual.
A quick calculation shows the tourism industry is set to lose out on more than R7.5 billion on accommodation alone from March to July, with little indication that the next few months will be much better.
The decline in revenue has and will continue to have an impact on tax revenues too. Value-added tax payments are set to be down more than R1.1 billion in the period March to July compared with 2019, while income tax on profits and employees’ salaries will evaporate too.
The impact on employment is equally distressing.
The department of tourism indicates the tourism industry employed at least 700 000 people in 2018 and that more than 9% of all jobs in SA are linked to the tourism industry. That was before the pandemic struck. How many are still employed is anybody’s guess.