Hotels hit hard by COVID-19 lockdown

The tourism industry has come to a complete standstill with big and small hotel operators seeing huge financial losses as a result of the COVID-19 pandemic, since many countries around the world remain under lockdown.

Locally major players like Sun International, Hilton Hotels and Tsogo Sun have shut down a number of hotels and casinos in accordance with government’s regulations aimed at stopping the spread of the coronavirus.

The Tsogo Sun Group reported that it would be closing 36 hotels which represents 40% of the groups portfolio. It has further indicated that some facilities have been offered to government for use as quarantine spots.

In Cape Town, more than 90 staff members of the Hilton Hotel say they are struggling financially after they were not paid their salary last month by the global hotel group which has closed over a thousand hotels worldwide.

Relief funding

The Department of Tourism says it will start dispersing the R200 million COVID-19 relief funding dedicated to small and medium enterprises in the sector. This after Afriforum and Solidarity failed in their court bid to challenge the distribution of funds based on Black Economic Empowerment criteria (BEE).

Tourism Department spokesperson Blessing Manale says, “It needs to be understood in the context of the overall relief measures of government what this fund specifically does, it’s capped at R50 000 and it’s mainly targeted at small to medium and micro-enterprises, so the big groups would not qualify firstly, secondly because that droplet would not really be a big game changer in their operations. But for the small operators, a person with 3 staff members, R50 000 becomes quite big for the small operators.”

Five international air transport and tourism bodies have appealed to international financial institutions and donors to provide 10 billion dollars in funding to support the collapsing African Travel and Tourism Sector.

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