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, according to Chair of FEDHASA, Rosemary Anderson.

Released earlier this week, the statistics show that the total number of liquidations increased by 46.2% in the second quarter of 2021 compared with the second quarter of 2020. An increase of 30.7% was recorded in the first six months of 2021 compared with the first six months of 2020.

While the easing of lockdown restrictions under the current Adjusted Alert Level 3 has brought some relief for the hospitality industry, FEDHASA believes that the industry will remain vulnerable in the 2021/2022 period, especially if there is not a consistent approach when it comes to future regulation adjustments.

“The South African hospitality industry has been bruised for 16 months and, in many cases, received a fatal bruising, with so many repetitive damaging lockdowns and restrictions imposed,” said Anderson.

“Many of these restrictions for all intents and purposes make 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.”

Anderson called on government 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. 

She suggested that, to achieve this, government could 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.

“This current one-size rule does not fit all and it is mostly damaging those businesses who employ the highest number of staff. We need to change this urgently, since these large establishments are struggling to hold on under the current criteria. We urge Government to reconsider the legislation so large hospitality operators can trade in a financially viable way, preserve the many jobs and livelihoods they are responsible for, and simultaneously still operate in a responsible safe way adhering to all COVID-protocols,” she added.

Anderson pointed out that, in addition to the restaurant sector, within hospitality, a number of SA’s top hotels had been closed since March last year, since their main market was overseas tourists.

“And with SA not being in alignment, with regard to our vaccine programme, with our main tourism markets such as the UK, we are red listed and their entire market has disappeared. These top hotels employ thousands of staff and we urge our Government to expedite the vaccine roll-out even faster, so we can start being aligned to our main international tourist markets and can then be justifiably removed from the red lists,” said Anderson.

She noted that the most recent statistics further illustrated that the subsequent on-off cycle of opening, closing and reopening following adjusted alert levels, further burdened the industry in its efforts to recover.

“Consistency is key to the survival of the industry. Behind every closed restaurant or hotel door and ‘for sale’ sign are the hundreds of livelihoods that hang in the balance or have already been lost.”

Anderson emphasised that trading under strict compliance together with mass vaccination of South African citizens was the only solution in the industry’s fight against COVID-19.

“FEDHASA has designed a robust set of health and safety protocols for COVID-19, and our members are acutely aware of the importance of adhering to these standards in order to safeguard the public and to be able to continue trading. Despite the looming third wave, there is no sector as cognisant of the direct relationship between adherence to protocols and the recovery of the sector than the hospitality and tourism industry,” she concluded.