How hospitality is being destroyed by an unwelcome guest – COVID-19

PUBLISHED: Fri, 27 Mar 2020 18:00:18 GMT

By Chris Bishop, head of programming, CNBC Africa

The business of bringing people together is being battered by the disease that’s driving everyone apart.

People all over the world are canceling their hotel rooms in the erstwhile holiday paradise of South Africa for fear of COVID-19. South Africa – with its world-class resorts and favourable exchange rate- was very popular with northern hemisphere tourists with money to burn. Now many fear to tread for fear of being quarantined in paradise.

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Closer to home, corporate giants are forgetting about entertaining their clients at football, cricket and rugby matches in a shut down that is likely to cost the industry billions.

A survey carried out by the government, the City of Johannesburg and tourism operators, issued Friday, showed that hotels had lost at least R764.8 million through booking cancellations alone between March 16 and June 20.

One hotel lost R150 million, out of R250 million as people cancelled in fear of COVID-19. At the other end of the scale, a small operator lost R20,000 of R50,000 in bookings – small maybe, but losses in an already tough economic climate just the same.

The average losses of those who took part in the tourism survey, was R44.5 million, which means less than 20 operators responded. How much more has been lost by the rest of the industry that brings in a healthy slice of South Africa’s foreign exchange earnings? How much more will be uncovered by the survey that the organisers say will continue – the mind boggles..
The hospitality industry too has taken a punch in the guts too as sport and events have been counted out by COVID- 19.

Johannesburg-based Richard Dunn runs a hospitality company called Playmakers that employs around 60 people. It runs hospitality tents and events for big corporates in South Africa like ABSA, KFC and Adidas. The COVID-19 outbreak came like a leg breaking late tackle on a star player as it wiped out professional sport in Africa.

“Our business is bringing people together and the outbreak simply stopped people coming together. Even if you have a pizza store, in Parkhurst, it is not safe for people to come in and eat in a group,” says Dunn, Friday, the first day of South Africa’s 21-day lockdown.

“I think the market is going to be dead for at least three months minimum. Even when it is all over it is going to take a long time to ramp up again. On top of that life will have changed, people aren’t just going to high-five and start hugging each other. This social distancing is going to be a part of life for a very long time.”

Playmakers has repositioned its business in response to the cash crisis posed by being forced to keep its hospitality tents in the store room. Ironically, it is finding new revenue by making video content for one of its big existing clients – a video guide on how to avoid COVID-19.

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