It’s been devastating for KZN’s hotel and hospitality industry, but as Matthew Hattingh reports, hoteliers are still hopeful.
Coronavirus: “It’s a bloodbath out there.” That’s how one hotel boss described the impact of the pandemic. A week into the new year and the landmark Hilton Durban announced it was closing its doors (but stressed this was temporary), while the Fairmont Zimbali Resort on the North Coast is under business rescue.
Across the country, figures are similarly grim. Income from the tourist accommodation industry nationally collapsed in March and April 2020, according to Stats SA surveys.
Thereafter the industry tottered to its feet, but by November was still 66,8% down on the same period a year earlier.
KZN was better positioned to capitalise on domestic tourists than the other coastal provinces and the festive season in Durban enjoyed a fair start. But it stumbled in late December when some lockdown rules were reimposed in an effort to stem a second wave of infections.
The closing of beaches saw the cancellation of 23% of confirmed accommodation bookings, according to Durban Tourism, who confirmed that in the last two weeks of December 2020, occupancies were around 55%, decreasing to 40 to 45% for the first two weeks of January 2021 due to the advanced level 3 lockdown restrictions. And it wasn’t only numbers of visitors that were down. Spending slipped 20% compared with the previous season.
Heather Hunter, chairman of Umhlanga Tourism, said the holiday town’s festive season got into a gallop about mid-December, but government’s announcement, including a ban on the sale of alcohol and a return to an earlier curfew, reined things in sharply.
“It’s like a ghost town,” she said in a mid-January interview. “Hotels are running at low occupancy; timeshares aren’t getting timeshares. We’ve got six rooms,” she said of her own B&B. “Three with business people for a week. Business people are still coming. Hopefully that will remain.”
The KZN North Coast as far as Amatikulu had been recovering well after the hard lockdown, said Cheryl Peters, the acting manager of the iLembe Economic Development Agency, but had been broadsided by the beach bathing and booze ban.
October to November occupancies ranged between 60% and 90% – surpassing 2019. December had started strongly too, topping 90%, she said, but had slumped.
“Covid did an about-turn and changed the whole picture,” said Peters. UIF relief for laid-off workers was largely gone and support funding from the national Department of Tourism was limited, she said, speaking before the January 26 announcement of a R1,2-billion Tourism Equity Fund to assist new black entrants into the sector. “We are trying to keep positive and support our industry as much as possible.”
The picture for KZN as a whole – a province where tourism in pre-Covid times contributed an estimated 9,5% of GDP – is somewhat anecdotal as KZN Tourism said it did not yet have data for the last quarter of 2020. However, it did provide commentary from Economic Development, Tourism and Environmental Affairs MEC Ravi Pillay, to whom the tourism body reports. Pillay confirmed what was already widely known: Coronavirus led to the cancellation of international conferences in the province and that lockdown “impacted greatly on … hotel occupancy”.
He said in the latter half of the year, as restrictions eased, there had been “some steady increases” in hotel occupancies, as domestic tourists, in particular, sought relief after being cooped up at home.
Amid the gloom there is a little light. Some businesses have proven resilient, while for others the pandemic has hastened a useful process of reorganising. In August the KZN-headquartered ANEW Hotels & Resorts group concluded its acquisition of Fortis Hotels and now manages over 1 000 “keys” and a staff of 900 countrywide.
Chief executive Clinton Armour said the process of taking over the management of Fortis properties, in addition to the Ocean Reef Hotel in Zinkwazi late last year, had begun long before the pandemic. But the pressures it brought to bear helped speed up the deal-making.
ANEW owns three hotels of its own in KZN. It manages – and in some cases leases – the balance of its 11 property portfolio. Armour told how ANEW had kept all its properties operating – with skeleton staff and only a few rooms open in some cases. This allowed them to cash in when some rivals had shut shop completely. “We were blown away,” he said of September and October bottom-line figures for some of their new properties.
Brett Gehren, chief executive and co-owner of the privately held Isibindi Africa Lodges, was upbeat too. He said their Thonga Beach Lodge enjoyed its busiest ever Christmas, softening the blow for the group, which has two other lodges in the province in addition to a Zimbabwean property.
With the Kosi Bay border post closed for a spell and long delays at the Komatipoort crossing, many tourists abandoned their Mozambique holiday plans in favour of an east coast fix at Thonga Beach. It helped too that Isibindi had slashed its accommodation rates, effective until June 2021. Gehren said they realised early during hard lockdown that they needed to move quickly to attract local tourists.
In pre-Covid times foreign guests accounted for 80% of Isibindi business, but the discount helped lure locals. Occupancies had averaged about 60% since September, said Gehren.
Michael Nel, managing director of Red Carnation Hotels, Southern Africa said they had been booked out for the year-end, but the Covid clampdown led to lots of last-minute cancellations and scuppered new year’s eve parties. About R1-million had already been spent on decor, entertainment, food and drink.
Still, Nel was optimistic. The group’s Oyster Box Hotel in uMhlanga did good pre-Christmas trade and remained a special occasion venue. Occupancies for 2020 averaged around 60% (which included the early, pre-Covid part of the year). That’s down on the 80 to 85% of previous years, but under the circumstances, encouraging.
“We have been really fortunate. We’ve always had a strong domestic market,” he said.
What of the year ahead? “When I talk to the destination management companies and tour operators, we all seem to think that in the third quarter international travel will start coming back,” said Nel.
Hunter felt guests from their key markets in the UK and Europe would return within six months as these countries got to grips with Covid. “We are now getting bookings from August, September and October from people who cancelled last year – Dutch guests and German. I think it’s because they are going to get the vaccine,” she said.
Vicky Wentzel, director of Southern Explorer, an agency which markets a tourism route on the KZN South Coast on behalf of about 150 members, felt the region would boom once lockdown was lifted.
Pillay said Tourism KZN would continue to aggressively market the province. “We are confident that as we move to a new era with the subsequent vaccines in the pipeline, that KZN will reclaim its top spot once again.” *
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Ravi Pillay, MEC of Economic Development, Tourism and Environmental Affairs.
Vicky Wentzel, director of Southern Explorer.