Plettenberg Bay’s hospitality industry estimate the town lost an excess of R674 million in tourism earnings between the months of October, November and December as the tourism industry experienced the cancellation of Plett Rage, the closure of their beaches and the ban on alcohol sales and consumption.
Earlier in the year, restrictions on travel to combat COVID-19 reduced airline travel and accelerated accommodation cancellations. These measures continue to affect the sector, reducing international inflows, and impacting the service sector-related employment with a high dependence on tourism.
The sector is arguably the leading source of income, earning R3.9 billion yearly on average pre-COVID. Tourism contributes significantly to Plett’s annual GDP and it is the largest employer in the town. As a world-class destination, international and South African guests flock to their award-winning and internationally recoginised beaches. The South African Domestic market makes up approximately 90% of the sector during the month of December, and the majority of all businesses in Plett rely on that December trade as it contributes to an average of 50% of their yearly profit.
South Africans were prepared to travel during the traditional December summer holidays. Beach destinations throughout South Africa were positioned to host South Africans during those few weeks, their survival dependent upon those guests. The small coastal holiday towns like Plett were hit with an additional crippling blow when the South African government announced the ban on their beaches.
Plett had expected a much higher occupancy rate for the month of December due to the traditional domestic market that comes to enjoy their beaches. When the beaches were closed the negative impact was quick, there was an immediate 30% cancellation and then an additional 40% in cancellations with the extension of the beach closure.
According to data collected through Plett Tourism’s quarterly survey, which included the peak summer season, at least 1,096 jobs in the hospitality industry were affected over the course of three months as accommodation, restaurants and tour operator activities recorded extremely low business.
The accommodation sector reported temporary staff loss at 372 and permanent staff loss at 222. The restaurant sector reported temporary staff loss at 98 and permanent staff loss at 294. The tour operator activity sector reported temporary staff loss at 61 and permanent staff loss at 49.
The town experienced up to 70% cancelations due to the beach closures which attributed to some of the job losses.
Financially, the accommodation sector was hit hard with 97% reporting a loss. In comparing the months of October, November and December of 2019 to 2020, 50% of survey respondents in 2019 reported an occupancy greater than 70%. In comparison, only 2% of survey respondents in 2020 reported an occupancy of greater than 70%. Sadly, the majority of the respondents for 2020 had an occupancy of less than 50%.
Based on Plett Tourism’s survey results, the accommodation industry in Plett saw revenue of approximately R1.35 Billion between the months of October – December in 2019. In comparison, there was revenue of approximately R674 Million between the months of October – December in 2020, which is a loss of 50%.
The restaurant sector saw an average loss greater than 50% due and the tour operator activity sector saw an average loss greater than 70%.
“The amount the tourism sector lost in Plett due to the beach closure announcement by the SA government is extremely worrying. We lost an excess of R674 million in just these past three months. An extremely large chunk of that due to the beach closure,” said Patty Butterworth, CEO Plett Tourism.
The pandemic continues to hit hard, Domestic tourism is helping to soften the blow, at least partially. Encouraging news on vaccines has boosted hopes for recovery but challenges remain, with the sector expected to remain in survival mode for quite some time.
Domestic tourism has restarted and is helping to mitigate the impact on jobs and businesses in some areas. However, real recovery will only be possible when international tourism returns. This requires global co-operation and evidence-based solutions so travel restrictions can be safely lifted. The crisis is an opportunity to rethink tourism for the future. Tourism is at a crossroads and the measures put in place today will shape the tourism of tomorrow.