Times Of Swaziland: TOURISM INDUSTRY NEEDS E100M BAILOUT

TOURISM INDUSTRY NEEDS E100M BAILOUT
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BY STANLEY KHUMALO on 16/06/2020 00:17:00


MANZINI – The hospitality sector needs E100 million to stay afloat.
This was disclosed by the Chief Executive Officer of Business Eswatini, Nathi
Dlamini. The CEO was responding to a question seeking clarity on the challenges
faced by the tourism industry while the country has opened up other sectors.
Dlamini said the tourism industry had taken a huge pounding from the coronavirus
pandemic. The virus culminated in the suspension of travel and partial or full
national lockdowns worldwide, which in turn affected the tourism sector
adversely.
He said despite that the economy had opened up in the country, many of the
players in the tourism industry were already casualties such that they would not
be able to operate moving forward.
Dlamini said the projected losses were incalculable for now; however, their
current estimates for the hospitality industry reflected that about E100 million
was needed urgently.
Package
“The bailout package of E100 million would just keep them going as they are
looking for a rescue package,” he explained.
He said currently, all the hotels were empty; yet they still had to pay their
rentals and mortgage and overheads. Dlamini said despite that, some of the
players in the industry had their employees on half pay they were now stating
that they had no choice but to retrench because there was no money.
“In fact, the hospitality industry was the first to be hit hardest and if the
virus persists, as it seemingly is, I doubt that some of them would be able to
pick up again. I’m not being pessimistic; but I’m just being realistic based
on what we see and also what we are being told by the players every day,”
Dlamini said.
He added: “It’s a bloodbath when it comes to the hospitality industry. I’m
not being an alarmist; but it is what it is – a bloodbath.” At the moment,
Dlamini said the hospitality industry needed government to sustain it until
everything was stable and there were no longer partial lockdowns across the
southern Africa region.
Economy
He said even though the country had opened the economy and was no longer on
partial lockdown, its neighbours were still on lockdown and that hindered any
prospect of activity in the industry for now.
“There are so many disharmonies on the lockdowns within the region and yet its
economy is integrated just like the travelling.”
Dlamini said these were some of the hindrances that were affecting the sector.
Given these challenges, he said somebody needed to bail-out the sector just like
it was happening in other countries.
He said other countries were offering packages to sustain the industry until the
virus was dealt with one way or the other. When COVID -19 has been addressed,
Dlamini said, the tourism industry would need to have vital signs.
“If the heart of the sector is pumping then it is easy to revitalise something
that is still breathing,” he noted.
Also, the CEO of the Eswatini Tourism Authority (ETA), Linda Nxumalo, said the
sector had submitted projected losses estimated to about E403 million based on
the tourism receipts. Nxumalo said this was being dealt with as a preliminary
analysis had been done by her entity. She said so far, assistance that was
available to the sector was that set by government through the Eswatini National
Provident Fund (ENPF) and that from the Eswatini Revenue Authority (SRA).
Supporting this was the Minister of Tourism and Environmental Affairs, Moses
Vilakati. He said the industry had been having talks with his ministry.
“The industry was not closed per se but it was affected by the travel ban that
was proposed to curb the spread of the virus. This eliminated any prospects of
domestic travel while also 80 per cent of tourists come from South Africa,”
Vilakati said.
He said the remainder were tourists who arrived in the country from Europe, who
were also stopped indirectly by the restrictions on flights by their respective
governments.
He said to mitigate the challenges, government suspended the bed levy, which
should have been implemented in April 2020. He said this levy was deferred to
July 2020 but looking at the way things were, they had to extend it again.
In a previous letter by Dlamini’s entity to the Principal Secretary in the
Ministry of Labour and Social Security, he took cognisance of the restrictions
imposed on the country on public gatherings, local and international travel
among many stringent moves set to deal with the virus; however, it was
highlighted in the letter that there was an inadequate address of the impact
COVID-19 had on the private sector.
“Very little has been said about the devastating impact of the virus on
businesses, especially on trade, the disturbance of supply chains and tourism;
as well as the labour market,” an excerpt of the letter read.
Impact
Dlamini said with the developments in South Africa, which on March 15, 2020,
declared a ‘National State of Disaster’ because of the scale and speed at
which COVID -19 was spreading, the effects of this declaration immediately had
an impact on the tourism and hotel industry.
In the initial weeks of the partial lockdown in the country, Dlamini painted a
gloomy picture of the tourism industry and said industry players had reported
room cancellations and drastically reduced numbers of tourists. For instance,
Dlamini said, Sun International had alleged to have lost E3 million bookings
through cancellations on March 11 -12, 2020.
“The Hilton Garden Inn lost over E1 million of business through cancellations
in one day while Mountain Inn lost E500 000 worth of business when the president
of South Africa declared a state of disaster.”
He said at the moment, the occupancy rates were around five to 10 per cent,
which could barely meet operational costs of businesses.