GARDEN ROUTE DISTRICT NEWS - Businesses in the tourism and hospitality industry are suffering tremendously and morale is low.
"We believe the President has done the right thing to lock down, but it is crucifying business," says Michael Cook, chairman of the Outeniqua Tourism Association.
"We rely on business people and tourists, and with a total ban on travel, members have zero income. We don't know how deep and wide the hole is going to be, even looking six to 12 months into the future. When we arrive at a point where people are allowed to travel again, how much money will they have to spend on holidays?"
Cook says although members struggle financially, the welfare of their staff is important to them. "Members feel a moral obligation to pay their staff, even if only partially, and we hope the UIF system will bear up."
About the financial assistance available through loans from newly formed private Covid-19 funds for business, Cook says, "I've had loans all my life and I know how difficult it is to pay them off. I think in such uncertain times, older business owners will be very cautious to enter into loan agreements that might help them to hold on to their businesses."
Major losses anticipated
George tourism manager Joan Shaw says they anticipate major losses, businesses closing and staff retrenchments in the sector, despite hopes that government and other assistance may help keep establishments afloat.
"That said, the tourism industry as a world-wide sector has through the years proven resilient in the face of major disasters including war, natural disaster and disease, and George Tourism will continue to market the town and region as the desirable and affordable destination it is.
"George Tourism is also represented on the Garden Route District Municipality Economic Cluster, which includes a sub group of professionals from the private and public sector, who will engage business support agencies and are tasked with development of initiatives and interventions to aid in the survival of businesses during and after the lockdown."
Abrupt loss of R2,5-million
Wilderness Hotel operational manager Leon de Kock says President Ramaphosa's announcement of the lockdown led to an immediate cancellation of most bookings, resulting in a loss of R2,5-million. "We receive about 300 tourists per day and suddenly, this supply was cut off. The hotel usually has an occupation figure of 70% throughout the year."
The hotel was able to pay its 150 staff members this month, and next month they should be able to cover part of the salaries. "We have immediately started the process of applying for Covid-19 UIF assistance for our employees."
He says all the hotels in the group, including Fairy Knowe in Wilderness, Point Hotel and Ocean's Hotel in Mossel Bay, The Arms in Sedgefield, Oakhurst in George and Gourikwa Reserve in Gourits, have come to a standstill. Only The Arms has one or two long-term occupants.
Survey: 33% may close
In a Garden Route business survey by George Business Chamber in the first week of lockdown, 37,54% (128 businesses) of respondents said they will have to consider closing down in the coming months.
According to chamber chairman Dr Dennis Farrell, the disruption of the lockdown on top of the effect of months of load shedding is proving too much for these businesses to absorb. If each of these businesses employs an average of 10 staff members, a total of 1 280 people will lose their jobs. This will affect their families and the livelihood of up to 6 400 persons, based on an average of five members per family.
Over 95% of the respondents indicated that the coronavirus will negatively impact their business over the next six to 12 months and 51% said they would probably have to lay off between 10% and 75% of their staff.
Out of the 347 respondents, the tourism and hospitality industry made up 36% (123 businesses).
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