In an effort to reduce government spending, the national treasury has introduced cost-cutting plans that include limiting government travel, conferences and catering for government functions.
However, this leaves the hospitality industry worried about its survival.
Alan Campbell, director of marketing and sales at Anew Hotels and Resorts, says that although this step is a positive one to promote fiscal responsibility, it is bad news for this sector.
“The tourism and hospitality industry relies on government-related travel, bookings and events, which play a crucial role in maintaining the local hospitality sector,” he says.
“This announcement could put tourism at risk while the industry is recovering from a series of unprecedented challenges, including the Covid-19 pandemic.”
Government officials, at national and provincial level, are regularly involved in various activities such as meetings, conferences, workshops and official functions, which require accommodation, conference facilities, catering services and transport. These activities contribute significantly to the revenue streams of hotels, event venues, restaurants and transport companies, and ensure employment.
South Africa’s hospitality industry has a major impact on the economy and also contributes to combating unemployment in the country by providing various job opportunities – hotel staff, taxi drivers and restaurant workers.
“The industry serves as a way out for unskilled people by helping them enter the workforce. It also particularly offers opportunities for skill development through internal training programs and the chance to earn a decent living,” says Campbell.
“However, we are concerned that the Treasury’s announcement could jeopardize employment in this sector.
“Less government-related travel could lead to fewer new hires, reduced work hours and the postponement of training programs. This in turn will have a detrimental effect on the livelihoods of many people and may worsen the unemployment rate.”
Campbell says the government must consult with the industry on how these restrictions will be implemented in the long term, then a time frame can be drawn up which will ensure that the restrictions are gradually introduced.
“Cooperation and flexibility will be crucial to sustaining the industry and protecting jobs and economic growth,” he says.
“Considering the industry’s important role in the economy and employment, it is essential to find a balanced solution that ensures fiscal prudence without jeopardizing the well-being of those who depend on the hospitality sector for their livelihood.
“Challenges often lead to innovation and resilience; with determination and creativity we can emerge stronger and create a sustainable industry for everyone.”
