African Safari Group (ASG) has entered voluntary liquidation, citing financial strain amid cancellations and unsustainable sales figures due to the ongoing COVID-19 pandemic as the main reasons.
In a letter sent to clients and suppliers yesterday (February 15), ASG management stated: “We have also been subjected to numerous chargebacks instituted by clients and have seen a dramatic reduction in sales.” It said all staff had been retrenched and that the business would close shortly.
In the letter, ASG said it was saddened to share the news of its liquidation but that it would uphold its responsibility to clients and that all bookings would be secured and taken over by suppliers. The handover of bookings would be facilitated by Top 10 African Safaris, who had already contracted some former ASG staff members to facilitate this process.
ASG was an inbound travel agent, offering safari experiences and luxury accommodation in southern and East Africa.
Other casualties of the COVID war
The financial strain experienced by ASG is not unique, and Tourism Update recently reported on another closure, when the owners of Jambo Guest House in Green Point in Cape Town announced that they had been forced to sell the property and close their business.
“We thought we’d be running the guest house till we died,” Barry Thomas – who co-owned the property with his wife – told Tourism Update. “We had zero income and had to let several long-serving members of staff go; one who had been with us for 19 years.”
CEO of Tourvest Destination Management, Martin Wiest, warned earlier this year that, without financial relief, there would be mass retrenchments in tourism. “A material number of insolvencies will start now as companies run out of their last reserves of working capital.”
Comprehensive relief needed
CEO of the Tourism Business Council of South Africa, Tshifhiwa Tshivhengwa, welcomed last week’s announcement by President Cyril Ramaphosa that the Unemployment Insurance Fund Temporary Employee Relief Scheme had been extended to March 15, but said relief for the tourism industry needed to be more comprehensive.
Tshivhengwa told Tourism Update that the TBCSA was committed to continuing to engage with government on the need for relief for the sector, especially as it would still take a while for international tourism to take off.
“And it’s not just relief for employees we’re seeking. It’s relief for tourism businesses, especially through government’s R200bn (€10.6bn) loan guarantee scheme – of which just over R18.9bn (€1bn) in loans have already been approved.”
Tshivhengwa said the TBCSA was lobbying for tourism businesses to be considered differently to other business loan applicants. “Short-term loans don’t make sense for the sector. We need medium- to long-term loans because tourism’s projected recovery will take longer.”