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17 December 2020: As South Africa begins the long journey towards recovery following the economic toll taken by COVID-19 and the associated lockdown, tourism remains a critical piece of the puzzle in helping stabilise and rebuild the economy. With foreign travelers now permitted entry into the country (upon submission of a negative COVID-19 test within 72 hours of departure), businesses in the tourism sector now need to focus on updating their operations to make the most of the current opportunities presented.

Anton Roelofse – Regional General Manager of Business Partners Limited (BUSINESS/PARTNERS) – explains, “Not only is tourism critical because of its contribution to the country’s GDP, but also because of the significant number of job opportunities that this sector creates both; directly and indirectly. The opening of South Africa’s borders came not a moment too soon. However, in light of the recent tightening of some other lockdown restrictions, the country’s tourism sector will still face some significant challenges.”

Indeed, tourism performed very well in South Africa in previous years, with 2018 and 2019 having seen an average of around 16.5 million international visitors per year. Optimistic projections at the time placed the annual number of international travelers entering South Africa by 2023, at nearly 20 million.

Unfortunately, 2020 witnessed a catastrophic decrease in activity. This year’s third quarter saw an 81 percent drop in revenue compared to the previous year. Even though the international tourism economy is anticipated to shrink considerably, Roelofse believes that the South African tourism sector has the potential to bounce back.

However, Roelofse caveats this by saying that businesses need to temper their expectations. “It may a bit optimistic to expect a massive surge in tourism right now. Travelers are taking many more risks into consideration now, as they prepare to travel. Additionally, while our country’s borders may be open, many other countries’ borders remain closed and many potential visitors are predicted to start traveling within their countries before venturing to other countries.”

He predicts that tourism’s recovery in South Africa is likely to be spearheaded by local travel first. “With so many people having been confined to their houses for so long, there is now definitely a desire to get out and see family across the country.

“We anticipate that interprovincial travel will see a significant spike. Given that the President recently announced the closure of certain beaches, restrictions on the sale of alcohol and the reinstatement of stringent curfews, businesses in the tourism industry will have to find ways of operating around these challenges.”

He adds, “Still, domestic tourism will offer some of the best opportunities to restart activity in this industry, as we head into 2021.”

“Businesses must now work to streamline and optimise their operations, leverage the opportunity provided by the reopening of borders, and increase their focus on local travel.”

With this in mind, he offers some tips to businesses in this sector:

Safety first

“The first priority of businesses is ensuring that their customers or guests feel safe. Businesses should focus on implementing stringent safety measures, to ensure the safety of their customers. New labelling, information apps and promotional campaigns are important, and will help in communicating that the business takes the health of its customers extremely seriously.

Keep it lean

Next, Roelofse says that businesses should look for ways to operate as cost and resource-efficiently as possible, keeping their business model lean and agile.

“The reality is that doing business in the ‘new normal’ economy is very different to what it was before. A company’s ability to adapt to these changes is now crucial. Businesses need to reconsider their target audience and change their strategy to ensure that the approach is realistic and accommodates this new reality – this includes making price adjustments to encourage more domestic tourists.

“Make use of local promotions and media platforms to stimulate business, through partnering with other companies wherever you can.”

Know your SEO

Lastly, he says that businesses must ensure that they are visible online. “If people start searching for tours and activities in their area, you need to appear in those searches. Do some research and update the keywords on your website.”

In closing, Roelofse says that the tourism sector needs to make use of the limited opportunities it has been given to recover. “It is now up to businesses in this industry to play it smart, and do their utmost to restore confidence, while stimulating more activity over the coming months,” he concludes.

About the Author: Anton Roelofse

Anton Roelofse
Anton Roelofse is our Regional General Manager for the West Coast Business Unit (Western Cape and parts of the Eastern Cape). He has been with our company for 35 years working and has supported thousands of SMEs through our finance and investment support programmes. In his role, Anton manages an investment portfolio of about R1 billion. Anton is a family man and enjoys a balanced lifestyle which includes sport, leisure time in nature and he is even known to enjoy the odd theater experience. Anton is our go-to-spokesperson for business turnaround strategy, business finance and hospitality and tourism industry articles.

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