PRESIDENT Cyril Ramaphosa’s decision to introduce stringent lockdown for the next days will have a devastating effect on the economy and certain industries, particularly the hard-hit hospitality industry.
On Sunday, Ramaphosa announced that South Africa will move to level 4 lockdown, with a complete prohibition on gatherings and the sale of alcohol imposed.
Opposition parties, including the Democratic Alliance (DA), said on Monday that the new measures introduced by government would be a huge blow to the South African economy.
Over 2.3-million people worked in the hospitality industry sector, from professionals to security guards.
It is the second-largest employer after personal services and ahead of the government.
Hotels and restaurants employ roughly another 500,000 people.
The statistics released last week by Statistics South Africa (StasSA) with focus on the accommodation and the food & beverage for the month April 2021, have shown income from accommodation decreased by 32,2% in the three months ended April 2021 compared with the three months ended April 2020.
The negative contributors to this decrease were: hotels [-40,4% and contributing -27,3 percentage points]; and ‘other’ accommodation [-18,6% and contributing -5,2 percentage points].
On Monday, the JSE-listed giant Sun International announced its decision to shut down its hotels and resorts, including Sun City and Wild Coast Sun, following the announcement of the new level 4 lockdown restrictions.
Graham Wood, group chief operating officer for hospitality at Sun International, said that the new regulations require casinos and restaurants to close – but given the new restrictions on leisure travel into and out of Gauteng, alcohol, and the curfew, their hotels and resorts will struggle to operate.
“So, we have taken a decision to temporarily close them too,” he said.
“We are mindful that the government is concerned about the risk of transmission and the need to curtail the rise in new infections. However, these restrictions will have a further negative impact on our tourism industry, the thousands of people employed and the surrounding local communities.”
He said that hotels and resorts would re-open if restrictions subside after the 14-day assessment period.
Restaurants have also been stopped from offering sit-down meals, while the new curfew means that businesses will have to close by 8pm.
The restrictions will remain in place for 14 days Ramaphosa said, and will be assessed thereafter.
The Beer Association of South Africa (BASA) said it is now seeking legal advice on the national government’s decision in the interest of protecting jobs and livelihoods.
“All of Sun International’s restaurants and casino properties will be temporarily closed from today, in line with new Covid-19 regulations announced by the President last night,” the group said in a statement.
“The group has also taken a decision to temporarily close its hotels and resorts, including Sun City Resort and Wild Coast Sun,” it added.
Similarly, Sun Vacation Club reservations can be postponed to a future date or space banked.
“We are mindful that government is concerned about the risk of transmission and the need to curtail the rise in new infections. However, these restrictions will have a further negative impact on our tourism industry, the thousands of people employed and the surrounding local communities,” said Wood.
“We remain hopeful that the worst of the latest Covid-19 outbreak will have subsided 14 days from now so that we can safely reopen our hotels, resorts and casinos,” he added.
Sun International’s share price fell almost 9% in afternoon trade on Monday (R18.15 at 13h35) following news of stricter Covid-19 lockdown restrictions in South Africa.
Other gaming and hotel counters listed on the JSE, including Tsogo Sun Gaming, Tsogo Sun Hotels and City Lodge, also saw falls in stock prices.
- Inside Politics & local agencies
