Tourism sector faces cashflow crisis due to COVID-19

  • 20,000 jobs at risk as tourism sector shuts down
  • Tourism operators in cash-flow crisis
  • Operators contemplate shutting down

The world is reeling from the ongoing Coronavirus pandemic and Botswana’s tourism is no exception. As the tourism sector shuts down following the travel ban due to COVID-19, almost 20 000 direct jobs are at risk, said Lily Rakorong, Hospitality and Tourism Association of Botswana (HATAB) CEO

Tourism is Botswana’s second-largest contributor to the Gross Domestic Product (GDP) after mining. According to Rakorong, over 18,000 people are directly employed by the sector, with the numbers ballooning to over 30,000 when supporting services are included, she revealed in an interview with The Botswana Gazette.

According to World Travel and Tourism Council (WTTC), tourism contribution to GDP has increased from 13% in 2008 to the current levels of 21% in 2017 and 19% for the first quarter of 2018, second after the mining sector. The 18 000 plus jobs are at risk according to Rakorong. Last week, Botswana Tourism Organisation (BTO) CEO Myra Sekgororoane announced a travel ban. Rakorong said there are tour operators in Botswana who focused specifically on the Chinese market.  

Lily Rakorong, (HATAB) CEO

“Those operators have recorded 100% cancellations. This means that they will be making zero revenue.”

Furthermore, the government has cancelled all conferences which were booked for this year, and guests, as well as tourists, have also cancelled their bookings. According to Allistair MacFarlane, Managing Director (MD) of Africa Wild Safaris, the travel ban means that even if people wanted to travel, they cannot. 

“This, of course, impacts business interruption insurance cover. We are uninsured until the travel ban is lifted. All the camps are shut,” he said, adding that his 200 plus staff is on three months special leave with full pay for now.

He said all lodges, mobile operators and hotels are doomed. At Cresta Marakanelo Group, Managing Director (MD) Mokwena Morulane said they have uncountable cancellations as a result of Coronavirus. He said they anticipate serious losses this financial year because revenue will be seriously eroded. According to the HATAB CEO, their members, most of whom are tourism sector players, are planning to lay off workers because businesses cannot afford to pay salaries while on shutdown. 

“There is no business continuity. Our members are in a cash-flow crisis,” she said, adding that already, hundreds of employees who were on temporary contracts have been laid off. “Even the full-time employees could lose their jobs,” she said. 

Rakorong further said other tour operators are contemplating business closure.

“The sad thing is that some businesses had taken credit facilities from commercial banks, and are supposed to honour monthly repayments. With this total shutdown, businesses will not make money,” she revealed.

Rakorong is hoping that the government will somehow step in with some aid to avoid a total collapse of the tourism sector. HATAB is working on a document which will advise stakeholders and the government on various ways through which jobs can be saved. It will also advise on how to ensure that businesses stay afloat, according to Rakorong. Additionally, she said the document will help with a recovery plan to ensure that post the Coronavirus pandemic, the tourism sector is not rebuilt from scratch. However, President Mokgweetsi Masisi said the government has appointed a committee geared at finding ways through which to tackle the Coronavirus pandemic. In a press conference last week, Masisi said the government will consider some form of aid to help affected businesses.

Source: thegazette.news

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