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Locals, corporates save hospitality industry - CEO

Feb 01 2016 15:34
Carin Smith

Cape Town - Thanks to domestic tourism and corporate travel the South African hospitality industry could grow its income by about 6.5%, according to Tshifhiwa Tshivhengwa, CEO of the Federated Hospitality Association of Southern Africa (Fedhasa).

He pointed out, though, that the impact of inflation means that the real increase of income in the industry is closer to about 1.5%.

Fedhasa represents the interests of hotels, guest houses, B&Bs, restaurants, caterers and industry suppliers as well as service providers.

"If you factor in increases in electricity prices and labour costs, for instance, then it looks like the industry has not really grown much. If we look at people coming to our hotels, we can say, yes we are surviving and our industry is being stabilised by local people travelling locally," he told Fin24 on Monday.

He reckons that is why a sense of continuity was created and there have not really been any retrenchments.

Tshivhengwa said the hospitality industry is not at a level it is supposed to be.

"We should have grown more. The rand is still weak and we should have had a bumper year. That is why we have to see where and how we can improve and grow. We are looking into that as an industry to see how to take advantage of factors like the weaker rand," he explained.

He said there could still be some positive impact derived from the weaker rand, but then obstacles like the new visa regulations should be addressed so that there are no unnecessary hindrances discouraging international travellers to SA.

READ: Tourism decline shows others eating SA's lunch

"Our members are feeling more positive about local tourism, but then the issue of disposable income comes into play. With interest rates going up, you are more likely to pay for your house or your car than travel if you have to choose. So, the question is whether South African consumers are still going to travel locally now that interest rates have gone up?" he asked.

At the same time he emphasised that there certainly were positives in the hospitality industry. These could be enhanced by ensuring that all obstacles for people travelling from overseas to SA were removed - but without compromising security.

"Should matters relating to the visa and immigration regulations, the proposed National Liquor Policy and the BBB-EE Tourism Charter Codes be accepted in its current proposed format, the impact will be detrimental to the hospitality industry. With this in mind, industry players need to align with associations that are able to make a meaningful difference to their businesses,” cautioned Tshivhengwa.

"Fedhasa will continuously lobby government to ensure we are a travel friendly destination in terms of visa regulation. We also want to focus on ensuring 'customer friendly staff' to ensure people have a good time here and go home and share the news with their friends and families. By this kind of word of mouth, more people will then come to visit SA."

He said he remained positive about the hospitality industry in SA and appealed to everyone to play their role to continue to create jobs and ensure that people have a good time in SA.

"We are ready as an industry and Fedhasa will continue to talk to our members about trends and to ensure positive experiences. At the same time we do want all those obstacles hindering tourism to be removed, especially when they are obstacles we can remove," he said.

"As an industry we are very positive, but we must make sure all the obstacles are removed, enable talks between industry and government and look at the impact of legislation before it is put out. We have to look at how to encourage people to travel more in SA. Remember, the hospitality industry is one of the largest employers in the country."

ALSO READ: Hospitality sector slates new liquor, BEE rules

travel and leissure  |  hospitality  |  tourism


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