Impact of COVID 19 lockdown on holiday rental industry in Plett
With South Africa and the rest of the world under various degrees of lockdown due to COVID 19, businesses are starting to count the cost. In addition, business owners must try and anticipate what their respective industries will look like when they are allowed to re-open.
There are probably some sectors that will bounce back quite quickly such as take away food and liquor stores. One may find that sit down restaurants may take a bit longer due to a higher price point, lingering concerns over social distancing and squeezed budgets. However, the sector that we would like to comment on is the travel and tourism sector, and specifically, the holiday home rental market in Plettenberg Bay that is our specialty.
I think there is little doubt that the tourism market has been severely affected by COVID 19.
Not only have existing customers been lost for the Easter holiday period, but future bookings have been cancelled as well. At the moment there is very little in the way of enquiries happening for any time in the future.
Our industry relies on the ability of people to travel, and of course, this basic human freedom has been temporarily removed. When we are allowed to travel once again, will we feel safe travelling long distances by air? When we get to our destination, what assurance do we have that the proper processes and controls have been followed by our host country and all the operators in the tourist trade. Will we be comfortable placing our trust in all these people who we don’t know at all?
Travellers are going to have a host of additional concerns that will need to be addressed by host countries and each participant in the tourism industry. The days of carefree travel with minimal health concerns are going to be gone for a while. Even once a vaccine is produced, how long will this take to be readily available on a global scale?
We think that the international trade will take a long time to recover to pre-COVID levels.
The holiday rental market in Plett has never been extremely reliant on international visitors and is still dominated by the traditional SA school holiday family market. What do we think will be the impact on this market? There are a few factors here that we have been thinking about.
Many employees have been forced to take paid leave during the lockdown time in order to secure an income. This will result in fewer days being available for leave later in the year when families would normally have taken a holiday. Of course, many employees are also working remotely where possible, so for this group the impact on leave balances may not be as severe.
Most businesses have been forced to close on a temporary basis. It will take these businesses a while to get back on their feet, and it is therefore very likely that many will take the decision to trade through December and January to make up for the lost time now. This means employees and business owners will most likely take the decision to stay at home and forego their annual summer holiday.
Unfortunately none of those bodes well for the Plett holiday rental market, and we foresee a tough remainder of the year lying ahead. It is our anticipation that some sense of normal trade patterns will only return in early 2021.
One potential positive that could occur, is an upswing in local tourism in the next 6 to 8 months. This is possible as South Africans choose local destinations that they know and trust, preferably within driving distance of their homes.
If South African tourism together with local tourism agencies focus on this market, we believe there could be an upside here as we seek to stretch our legs after five weeks of being cooped up.