PLETTENBERG BAY - The Plettenberg Bay hospitality industry – a major contributor to the area's economy - has bled more than R670-million and more than a thousand jobs in just three months as a result of Covid-19 restrictions.
This is according to statistics gathered by local tourism body, Plett Tourism. Acting chief executive Patty Butterworth said they estimate that the coastal holiday town had lost more than R674-million in tourism earnings between October and December last year as a result of the cancellation of the popular student festival, Plett Rage, the closure of the area's beaches and the ban on alcohol sales in hotels and restaurants.
The losses started earlier in the year, however, with restrictions on travel which reduced airline incoming travel and accelerated accommodation cancellations.
"These measures continue to affect the sector, reducing international inflows, and impacting the service sector-related employment with a high dependence on tourism," Butterworth said.
This was a major blow for the town as the hospitality sector was the leading source of income for Plettenberg Bay, generating an average of R3,9-billion in earnings annually before Covid-19 struck.
"Tourism contributes significantly to Plett's annual GDP and it is the largest employer in the town. As a world-class destination, international and South African guests flock to the award-winning and internationally recognised beaches.
"The South African domestic market makes up approximately 90% of the sector's income during the month of December, and the majority of businesses in Plett rely on that December trade to sustain them, as it contributes to an average of 50% of their annual profit."
It was therefore a "crippling blow" when the beach bans were announced in December.
"The bookings for accommodation in Plett during the period leading up to the December- January period exceeded expectations and Plett was anticipating a relatively high occupancy rate for that period, but when the beaches were closed, the negative impact was immediate with a 30% cancellation rate and then an additional 40% in cancellations with the extension of the beach closure."
Butterworth said data collection through Plett Tourism's quarterly survey, which included the peak summer season, showed that at least 1 096 jobs in the hospitality industry were affected over the course of three months as accommodation, restaurants and tour operator activities recorded extremely low business turnover.
"The accommodation sector reported temporary staff losses of 372 and permanent staff losses of 222. The restaurant sector reported temporary staff losses of 98 and permanent staff losses of 294. The tour operator activity sector reported temporary staff losses of 61 and permanent staff losses of 49," she said.
"The town experienced up to 70% cancelations due to the beach closures which contributed massively to the job losses."
Financially, the accommodation sector was hit hard with 97% of businesses surveyed reporting a loss. "In comparing the months of October, November and December of 2019 to 2020, 50% of survey respondents in 2019 reported occupancy of greater than 70%. In comparison, only 2% of survey respondents in 2020 reported occupancy of greater than 70%. Sadly, the majority of respondents for 2020 had occupancy of less than 50%."
Based on Plett Tourism's survey results, the accommodation industry in Plett realised revenue of about R1,35-billion in October, November and December in 2019. In comparison, for the same period in 2020, revenue of about R674-million was realised, which constitutes a loss of 50%.
Butterworth said the restaurant sector saw an average loss of greater than 50% and the tour operator activity sector saw an average loss of greater than 70%.
"The financial loss to the tourism sector in Plett due to the beach closure announcement by the SA government was devastating. We have lost in excess R674-million in just these past three months. An extremely large chunk of that is due to cancellations resulting from the beach closures."
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