Africa Travel Week

COVID-19’s ripple effect

Tourism has shut down and the impact will be felt for longer than other sectors post the COVID-19 pandemic. Gillian Saunders explores the challenges our industry is facing, what the road to recovery may look like and ways to weather the storm.

As countries moved into different stages of lock down, virtually all international travel stopped, as did initially local group and event travel, followed by all local travel. This resulted in no income for many business most of which do not have the cash resources to cover fixed costs and debt. The challenge for the travel and tourism industry is that the road to recovery will be a long one as local tourism will initially be slow due to a depressed economy, job losses and salary declines as well as international boarders remaining closed for quite a long time. 

As the COVID-19 response impacts are felt across the continent, one cannot ignore the the fact that various industries will be negatively impacted due to the decrease in travel and tourism. For the 2019 year-end, SANParks tourism revenue was 72% of its R3 billion total revenue. Without entrance fees and other tourism revenues, there are significantly depleted conservation funds available to support maintenance, anti-poaching and security as well as flora and fauna management programmes.  A Mckinsey report has forecast that due to COVID-19, 1 in 3 jobs could be lost on the African continent. Unemployment could lead to increased poaching due to a lack of food supplies. Without our parks and their protected flora and fauna, we lose an essential and key element of our tourism product and it is no doubt more at risk in the post COVID-19 recession environment. This will need concerted attention and action.

Another ironic possibility, but also one of the reasons governments may have miscalculated the economic impacts of the containment measures, is that tourism has still not been fully understood or appreciated as an economic sector, and after this event, perhaps there will be more recognition of its economic contribution. The lack of understanding results in an underestimation of the impact of travel bans and gathering bans, and a lack of understanding of the early and enduring impacts of the containment measures on this industry. For instance, the lock-down period and the three-months duration of the TERS relief will not help tourism businesses for long enough.

It is not unlikely that 2020 in South Africa will see five months of no travel and tourism (roughly March to July) and the remainder at well below 50%, a total decline in this industry of possibly 75% (or more) for the year. Tourism supports directly and indirectly 1.5 million jobs, that means potentially more than 1.1 million less jobs due only to decline in travel and tourism. These impacts will ripple through the economy in ways that will surprise people.

For instance, the car hire industry alone purchases almost 10% of the vehicles manufactured in South Africa, and this is before the many coaches and mini-busses that the tourism wheels operators buy locally. So, travel and tourism’s decline will impact vehicle manufacture significantly.

A little known fact is that tourism represents directly (before the multiplier effect) some 8% of the retail industry in this country. Travel and tourism also drives sales of petrol, diesel and jet fuel (travel needs fuel), manufacture of textiles (towels, linen, blankets, duvets, décor fabrics, uniforms), furniture,  crockery, cutlery and kitchen equipment, cleaning products and guest supplies, services such as banking (credit card fees are a big element for banks), marketing, and laundry, security and so on.    

So, on average the tourism industry in South Africa results in tourists consuming some 50 million eggs per year.       

And finally, agriculture – not just the wine and beer industries, but all agriculture. Take just one product and one hotel group. City Lodge (which only does simple breakfasts) consumes 1.4 million eggs a year. City Lodge has some 7 000 rooms out of an estimated total of some 250 000 rooms in South Africa. So, on average the tourism industry in South Africa results in tourists consuming some 50 million eggs per year. Add to this poultry and meat, grains, milk, cheese, vegetables and fruit – tourism supports a chunk of the local agricultural sector.

The ripple effects of the longer than lock down impacts on the tourism industry are going to be widely felt through-out the economy.   

I don’t possess a crystal ball, but I do see a staggered potential for demand revival which will probably be:

  1. Local essential business travel – depressed due to depressed economy
  2. Limited local leisure travel – depressed due to depressed economy and job losses and salary declines
  3. Limited local meeting and event travel – depressed due to the economy and substituted with online solutions for events, as a cost saver and companies now more comfortable with this option
  4. Limited intra-Africa regional travel – business and individual leisure
  5. Limited overseas international inbound business travel
  6. Local and Intra-Africa conference and event travel
  7. Local travel begins to stabilise at ‘new-normal levels still with economic and supply/price constraints      
  8. Limited inbound overseas International leisure travel
  9. Intra-African travel begins to stabilise at ‘new-normal’ levels – could be higher than pre-COVID-19 as we start to support each other and strengthen economic integration on the continent
  10. Limited inbound overseas international conference and event travel
  11. Inbound overseas international travel begins to stabilise at ‘new-normal’ levels

This may start in mid-2020 but will not be at whatever ‘new normal’ is before 2022 and then stabilisation will just be starting.


  1. Keep top of mind – respectfully and purposefully (using technology) with your clients and markets
  2. Conserve cash – plug into as many government support initiatives as possible, cut marginal costs, minimise fixed costs, and enter into debt repayment arrangements with loan provider
  3. Work with your employees – you are in this together
  4. Work with your destination at all levels – local, area/provincial and national on new growth planning – however that will look
  5. Gear up/change to serve domestic and regional markets
  6. Identify possible new opportunities – tech-based, travel with purpose, off-setting, social enterprises/employee and community involvement
  7. Identify how you might tweak/change your brand – your brand values, and how you might offer experiences and value to post COVID-19 markets. What will you change?

Gillian Saunders

Until mid-2018, Saunders was Deputy CEO of Audit Tax and Advisory Firm, Grant Thornton in Johannesburg, and head of their Advisory Services in South Africa. She has a long track record, of more than 30 years in her specialty: consulting to the hospitality, tourism and leisure industries. In 2012 Saunders was appointed Global Sector Leader, Hotels and Tourism for Grant Thornton and she led a team of experts in various fields related to the industry from over 25 countries. Saunders has consulted extensively in all aspects of these industries for the public and private sector throughout Africa. She is a member (and previous chairperson) of the board of the University of Johannesburg’s School of Tourism and Hospitality and is passionate about education and education in the Hospitality and Tourism sector.