CONSISTENCY in lockdown regulations is now key for the full recovery of the industry, says Fedhasa. Picture: Pexels.
CONSISTENCY in lockdown regulations is now key for the full recovery of the industry, says Fedhasa. Picture: Pexels.

Insolvencies and liquidations in SA travel sector: Fedhasa demands government do more to preserve industry

By Travel Reporter Time of article published Jul 30, 2021

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Fedhasa says the latest statistics released by Statistics SA regarding insolvencies and liquidations in the accommodation, food and beverage sectors indicate how financially damaged the industry is.

The statistics, which were released this week, show the total number of liquidations increased by 46.2% in the second quarter of 2021 compared with the second quarter of 2020.

It recorded an increase of 30.7% in the first six months of 2021 compared with the first six months of 2020.

Fedhasa believes that the industry will remain vulnerable in the 2021/2022 period if there is no consistent approach to future regulation adjustments.

Rosemary Anderson, Fedhasa National Chairperson, said the South African hospitality industry suffered for the past 16 months due to the pandemic.

“Many of these restrictions makes operating not financially viable. Even under the current trading restrictions for restaurants, the number of a max of 50 patrons inside makes it financially unviable for larger restaurants such as 500 or 600 seaters to trade.

“The same goes for large non-accommodation outside resorts such as picnic resorts with many acres of land – where only 100 people are allowed outside.

“We ask for the government to please look at this to try to stop the current massive shedding of jobs in the larger restaurants and non-accommodation resorts, where jobs are currently being lost at an alarming rate.

“Government needs to put in the criteria similar to the current outdoor space at hotels, where up to 50% of the usual space can be used. This would allow large restaurants and non-accommodation resorts to trade in a financially viable way and halt the massive shedding of jobs," she said.

She said the government should reconsider the legislation to help large hospitality operators to operate in a financially viable way and preserve jobs.

“We still have a number of our top hotels who have been closed since March last year, since their main market is overseas tourists. With SA not aligned with our main tourism markets like the UK in terms of the vaccine roll-out, our entire market has disappeared.

“These tops hotels employ thousands of staff, and we need to expedite the vaccine roll-out even faster than is being currently done to align to our main international tourist markets to be removed from the red lists,” Anderson said.

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