Coronavirus threatens Africa’s tourism market

The outbreak of the coronavirus has left a trail of destruction in its wake, with close to 3 000 deaths and more than 80 000 infections reported globally by Friday. It has also wreaked havoc on the global economy.

The ease with which people contract it has resulted in China imposing a ban on outbound tourism in a bid to contain the spread of the virus. This ban could see the local tourism and hospitality sectors lose revenue and shed jobs.

According to the PwC Hospitality Outlook for 2019-2023, released last week, “the global economy entered a phase of ‘slowbalisation’ before the world became aware of the accelerating public health emergency surrounding the coronavirus disease last year”.

The firm estimates that about 1 000 people within the South African tourism industry are at risk of losing their jobs because of the outbreak.

“South Africa received nearly 97 000 Chinese tourists in 2018. The potential decline in Chinese arrivals in the country is hard to gauge at present.

“Using some simplifying assumptions, we estimate a potential loss of at least R200 million in Chinese tourist spending. This suggests about 1 000 jobs in the local tourism and hospitality industry could be on the line,” reads the report.

However, it is not only tourism that will be affected. The economic growth of countries will also be hit hard.

The PwC reported that “room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 7.4% in 2018, up from the 1.9% increase in 2017”. South Africa is projected as having the slowest growing market “with a 3.3% compound annual increase in room revenue”.

Short-term letting services, such as Airbnb, had also boomed.

“On the Airbnb platform we have seen strong growth in Africa generally. In fact, three of the top eight fastest-growing countries are in Africa,” the report said.

“In Nigeria guest arrivals grew by almost 213% in one year [July 2017 to July 2018] and listing numbers went up by more than 200%. Ghana’s guest arrivals in the same period grew by 141%,” said Velma Corcoran, country manager for Airbnb in sub-Saharan Africa.

In the budget speech this week, Finance Minister Tito Mboweni said he would engage with the tourism department and the tourism industry on formalising the tourism levy.

Enver Duminy, CEO of Cape Town Tourism, said: “We look forward to these engagements with government which we hope will ensure that Cape Town and our sector continue to create jobs and bring in much-needed foreign currency.”

Guy Stehlik, CEO of BON Hotels, agreed: “Further to the tourism industry, we welcome the president’s announcement about the tourism police concept in his state of the nation address. We foresee that Minister Mboweni’s decision not to raise income tax or VAT will result in an improvement of the tourist experience for domestic and international travellers.”

Meanwhile, two cases of coronavirus have been confirmed in Algeria, after the first case in Africa was reported in Egypt earlier this month. A case was also confirmed in Nigeria on Friday.

South Africa remains a “high risk” country according to the Lancet medical journal. The country has not yet banned tourists from China.

The PwC predicts that Chinese tourist arrivals in South Africa could decline by more than 15% this year.

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