Tourists in our homes

South Africa relies heavily on tourism for jobs and international income, but the lockdown has put paid to that. How, then, can the industry open itself back up? And what impact can technology have?
Read time 11min 20sec

The Covid-19 pandemic has impacted many industries. Some have been allowed to continue during lockdown with limits in place, some are starting to open up again, and others have been put on house arrest for the foreseeable future. With restrictions on travel and personal movement, one of the hardest hit sectors has undoubtedly been tourism and hospitality.

“Tourism has been consistently growing through history, where more and more people are travelling and experiencing other parts of the world. However, tourism worldwide is now going through a major crisis,” says Manny de Freitas, the DA’s shadow minister of tourism.

A report into the economic consequences of Covid-19 and tourism by the UN Conference on Trade and Development (UNCTAD), published in July, plotted three scenarios – moderate (equivalent to four-month stalling on all international tourism), intermediate (eight-month pause) and dramatic (12 months). The projected losses in revenue by global tourism and related sectors ranged from $1.2 trillion (1.5% of Global GDP) to $3.3 trillion (4.2% of GGDP).

The UNCTAD report cites WTO figures that state in 2018 there were 1 407 million international tourist arrivals globally, which was six percent up on the previous year. It also notes that tourism receipts amounted to $1 480 billion, an increase of 4.4% from 2017.

Tourism is a major employer, directly and indirectly with contributing spin-off sectors – from construction to food. The WTO estimates that globally, between 100 to 120 million jobs in tourism will be lost due to the pandemic, depending when international borders reopen. To give some local context, the latest data from StatsSA says that in 2016, one in every 23 employees in South Africa was related to the tourism industry, with 687 000 people employed directly; that figure is higher than the number employed in mining. The tourism sector directly contributed 2.9% to South African GDP. Last year, over 10 million tourists visited South Africa from other countries – 72.7% from SADC, 25.5% from overseas and the remaining 1.6% from Africa.

The UNCTAD report estimates that in the moderate scenario, four months of stalled tourism, South Africa can expect a three percent decline in GDP, and a fourpercent decline in unskilled employment.

However, given the dates coming from government, the sector is in for a much bleaker future. In a May statement, as South Africa moved down to Level 3, tourism minister Mmamoloko Kubayi-Ngubane said: “Although we will be gradually opening up the sector in the coming months, depending on how the virus is spreading, we expect that the sector will only fully recover towards the end of this year.”

Following the tourism department’s revised budget being presented at a portfolio committee meeting in July, De Freitas notes that the presentation `essentially indicated that the sector would open up any time between 12 to 24 months’ time.”

Manny de Freitas, the DA’s shadow minister of tourism.
Manny de Freitas, the DA’s shadow minister of tourism.

De Freitas is critical of the lack of clarity over a date, calling it ‘as clear as mud’. “We understand we can't open the borders yet, domestic or international, but what South Africa’s tourism industry is asking for is at least an estimated date when the borders could open. The statistics show that on average, people book between two to six months in advance, and overseas travellers book up to 12 months in advance. The tourism industry wants to know when the borders will open, so it can start marketing, which is vital. Potential tourists from outside SA can't plan at the moment because they don't know when the borders will be open again.”

Tim Cordon, area senior VP: Middle East and Africa, Radisson Hotel Group, recognises the difficulties faced by governments, but with an unknown future, he says planning ahead has turned into a challenge.

“Normally, we forecast on historical trends, data we know or event cycles, but that's all out of the window. Our forecasting now, I would call it best guess, is looking back over previous crises, 9/11 or the global economic crisis, SARS, MERS, and trying to pull a hybrid model from that to understand what the likely scenarios are for the coming year.

“When the scale of the crisis became clear, we immediately started working on understanding the impact of previous crises and started to model from that. A global or multi-jurisdictional recession has a recovery of six to seven years, but a pandemic is in the region of two years. The pandemic is already causing a recession in many countries, so we think a hybrid of those models is likely; we're thinking somewhere in the region of 2022-23 that we might see a return to the levels of business we saw in 2019. But first, we need to discover the level of demand. That only comes back when consumer confidence returns and people feel confident coming to the hotels.”

Radisson in South Africa has forward bookings for the end of the year, which, Cordon says are comparable to the same time in 2019. “We can see international demand coming in from Europe. But how much of that will materialise?”

Next steps

So how do we get out of this situation?

Cordon oversees operations in 34 countries, so has studied the national approaches of various governments with lockdowns and easing of restrictions, as they are all at various stages in the pandemic cycle.

“The crisis has become an economic crisis, but it started out as a safety crisis, a human crisis, and that needs to stay at the front of our minds – how to look after travellers, guests, teams, buildings and so on.

“The next thing is to unlock different regions, allow more frequent tourism between the centres – Cape Town, Johannesburg, Durban – to try to get more domestic tourism going. Domestic tourism is the first to rebound. Our Tunisian resorts have been busy at the weekends as locals are keen to get down to the beach, and there's a pent-up demand and a feeling everyone wants to go and enjoy themselves.”

Tourism is essentially one thing, and that is experiences. It's not just about seeing the sights, it's hearing the sounds, the smells, every one of your six senses is engulfed in it.

Manny de Freitas, DA

Enver Duminy, CEO of Cape Town Tourism, says the way people travel is going to change, as they look for holiday destinations closer to home that they can drive to. “Many travellers will be uneasy about taking flights, using a train or taking a bus right now. There will be a much larger focus on domestic travel and our tourism industry will need to adapt to attract a local audience.”

As much as domestic tourism will provide some economic relief, there is a shelf life to that, says Cordon. “It’s a relatively small market currently, but right now, with very low occupancy rates, even that would be welcome.”

The next stage, he says, is gradually opening to a limited number of countries, selected by how the epidemic has impacted them, infection rates and growth rates. Then starting to work with the airlines to get those travel corridors going, he says.

“The key to unlocking it in a more sustainable way is getting the airlines moving. The sooner we can get international tourism moving, the better, so long as it’s safe and appropriate,” he says.

The role of tech

Twenty years ago, travel agents were the main way that tourists booked holidays. The arrival of the internet disintermediated that experience, enabling tourists to research locations, facilities, create their own itineraries and book directly. Then, of course, the rise of Airbnb opened the market up further, providing a wealth of accommodation options, says De Freitas, from five-star palatial mansions through to a hammock in someone's back yard, and everything in between.

“Tourists don't need to stay in the more expensive hotels, they can stay in a Gogo's spare room in Soweto or Khayelitsha. People across the world want to travel and have an authentic experience, they want to live with the locals. It fits your pocket, and the accommodation is rated and ranked by the users,” he says.

This has created a wave of entrepreneurs who have been able to host guests in a spare room in their home. The current lockdown regulations have halted this informal section of the tourism sector. It’s not just the hosts who are suffering, though.

“There are statistics that show that people from townships in South Africa and favelas in Brazil were travelling overseas, because they don't have to pay the middleman the extra percentage. They can do the research themselves and stay wherever suits their pocket,” says De Freitas.

While it doesn’t replace the revenues lost, technology is being employed by some to fill the gap.

“We’ve seen many of our members offer virtual ways of exploring Cape Town,” says Duminy. “We ourselves have taken our visitor information centres into the digital realm to ensure that potential guests are still able to interact with us and we are still able to offer the support they need for planning their future visits to the Mother City.”

Virtual game drives have also become popular with services like WildEarthTV, which is seeing viewer numbers increase significantly. This also has the benefit of building demand for international tourism, once the plane doors are open again.

“Virtual safari tours, filmed by the guides or rangers, or tours of hotels, will only encourage and assist tourism. If someone is in Canada and does a virtual tour of Kruger Park, they’re going to want to get on a plane and go there. They’re not going to be satisfied to see it on a video, they’ll want to experience it for themselves. Tourism is essentially one thing, and that is experiences. It's not just about seeing the sights, it's hearing the sounds, the smells, every one of your six senses is engulfed in it.

“The mentality with virtual game drives before was that it would stop people from coming because they've seen it. I think the people who won't come wouldn't have come anyway, because it doesn't interest them. I'm predicting the way tourism destinations are marketed and discussed, based on the experiences we've learned in this lockdown, will strongly impact and we'll see differences in future,” says De Freitas.

Radisson has also taken the lockdown period to reassess its digital strategy. Before the crisis hit, the company was in the process of reinventing its digital platform. “We were already developing a property management platform, which would have massively increased functionality. Throughout the pandemic, we've accelerated various elements of that. Specifically, we'll be launching an online check-in process. You could argue that's long overdue, but for our industry, it will be quite ground-breaking, because it's not a 'lite' check in, you can fully check in. When you get to the hotel, you're limiting contact with anyone else, to just collecting the key, which will have been sanitised.

“On checkout, you can choose to have your bill sent by WhatsApp on the morning you’re leaving. You can reply and if it’s all in order, we will charge your credit card. You don't need to go to the desk, you can just leave.

“We're also engaging with text, WhatsApp and an element of AI to revive our guest engagement platform; simple questions you'd pass by the concierge. We can do that through chatbots or remotely through text or WhatsApp. We're trialling that in a number of hotels before we launch it more widely. Those solutions are relevant anyway, because they’re convenient, but never more so than now.”

While the industry waits for the worst of the pandemic to pass and for tourists to start visiting again, either from other provinces or the rest of the world, this is the time to start thinking how to evolve digitally, says Duminy.

“To ensure that the industry bounces back quickly, we have to adapt to a new way of thinking and a new way of travelling. Our businesses need to become more digitally savvy and, importantly, we need to ensure that we’re ready to meet the changing needs of the modern traveller.”

Unfortunately, it seems that the industry is going to have a long time to think about and prepare for the new wave of tourists to come. And while employing digital technologies will undoubtedly improve the experience, we can only hope that the sector can survive that long before virtual holidaymakers can actually become real ones. 

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