Life goes on… but Hope is not a Strategy

South Africa’s situation is very different to countries which have already experienced the brunt of the coronavirus.

CoronavirusAs a country, our economy is in tatters after 10 years of State Capture and mismanagement.  National & local government have often been tourism’s worst enemy, demonstrated by the visa issues and, in Cape Town, the Day Zero messaging during the drought. President Cyril Ramaphosa’s announcement of the National State of Disaster was timeous and bold. But with empty coffers, the road ahead is going to be an almost-impossible balancing act.

The biggest challenge in SA in going to be keeping people alive — not only from Covid-19, but keeping a roof over their heads and food in their stomachs.

The U.S. Centers for Disease Control and Prevention projected that between 160 million and 214 million people in the United States could be infected over the course of the pandemic. As many as 200,000 to 1.7 million people could die in the USA.  German chancellor Angela Merkel said she expects 70% of Germany’s population to become infected.

In South Africa, between 28 million and 40 million people could be infected and between 35,000 and 300,000 South Africans could die, mainly the elderly and immuno-compromised.  In 2015, some 200,000 South Africans over the age of 60 years died, mostly due to old age and disease. There will be significant overlap, with elderly people dying sooner and over a shorter period of time, due to respiratory issues, but the total number of deaths in 2020 might not be much more than in 2019.  (In 2018, according to the WHO, 64,000 South Africans died from tuberculosis – a treatable disease.)

But remember, these are only opinions not facts, and opinion is really the lowest form of human knowledge.  China seems to be past the worst of its crisis, with “only” 0.0056% of its total population infected by the virus.  Italy as of 18 March has reported 0.059% of its population being infected.  In Germany it’s 0,015%.

But in spite of all that, life goes on.  We can slow the virus down — mainly so that health services are not overburdened (as they became in Italy) — but… until a vaccine is developed… it will run it’s course.

The big challenge is to flatten the curve so that healthcare services can cope

The big challenge is to flatten the curve so that healthcare services can cope

The virus appears to be like the common cold and flu — it prefers cold weather, so it is seasonal.  The coming summer in the northern hemisphere should help there, but it could mean that it’s partially dormant in South Africa until winter starts in the coming months.

Of those impacted 80% will be early-stage, 15% mid-stage and 5% critical-stage. Early-stage symptoms are like the common cold and mid-stage symptoms are like flu; these are stay at home for two weeks and rest. Some 5-6% will be critical, requiring hospitalisation, and highly weighted towards the elderly.

There is a debate as to how to address the virus before vaccines become available.  Quarantine is likely to be ineffective in the long term and will result in significant economic damage but will slow the rate of transmission giving the healthcare system more time to deal with the case load.

Finding out what’s happening and what the plans are

If you go to the Department of Health’s website, as advised by SA Tourism, you’re going to be sorely disappointed.  Their last update was on 20 February.

The Department of Health's website shows the last status update for Coronavirus as of 20 February 2020. (Today is 18 March.)

The Department of Health’s website shows the last status update for Coronavirus as of 20 February 2020. (Today is 18 March.)

Nowhere on the Department of Health’s website does it tell you that they have opened a new website for Coronavirus — https://sacoronavirus.co.za/.  But even that wasn’t kept up to date — the last update was on 15 March until late on 17 March.  The President acknowledged shortfalls in keeping the public informed and promised total transparency.  I hope Finance minister Tito Mboweni heard that — at a session with the media, he refused to divulge how much money is in the Disaster Fund which he will be tapping into to support government’s efforts.

While CapeInfo accepts that South Africa’s biggest challenge is going to be how it affects our poor, our primary focus is tourism, so the impact this pandemic could have on the tourism industry is what concerns us most.  I was disappointed that the President’s announcement paid so little attention to tourism — because it is the one industry that can address so many of SA’s economic and social woes.

What do we know and what has been said?

Minister of Tourism, Mmamoloko Kubayi-Ngubane, on 9 March 2020:  “Simply put, ladies and gentlemen, we do not have the resources to offset the damage that our economy will suffer because of this crisis.

“The question is what is it that we need to do, together, in the short to medium term to minimise the impact of the virus on the tourism sector? Given the uncertainty around the evolution of the spread of this virus, we cannot at this moment provide definitive answers.”

Sisa Ntshona, CEO of SA Tourism, quoted in BusinessLive and Fin24.

News reports in BusinessLive and News24 carried reports from the industry in the week leading up to the President’s announcing the State of Disaster.  I was astounded at the lack of insight or foresight.

SA Tourism’s CEO statement that domestic travel may be the antidote to the drop in foreign arrivals was mind-boggling!  That wasn’t achieved during last year’s drop in international arrivals and completely ignored the reality of what was happening in the rest of the world.

On 15 March in Fin24, Hospitality body Fedhasa Cape says its member establishments are ready to welcome visitors to the Western Cape despite global travel concerns.

“While we have seen a decline in travellers from affected countries, such as Italy, we’ve seen more visitors from countries such as the US, Canada and Germany. We’ve been pleasantly surprised by the resilience of travellers, and this upswing could be a result of travellers choosing to visit destinations that have not been severely affected by the virus,” says FEDHASA Cape spokesperson Richard Lyon.

What’s happening internationally to support economies?

  • In the USA, the Trump administration has called for a $1 trillion infusion, a quarter of it in direct cheques to millions of Americans, while the Federal Reserve said it would backstop a separate $1 trillion source that is used by companies to cover payroll and day-to-day operations.
  • In Europe, hundreds of billions of euros have been pledged to support citizens and the economy. A halt to utility bills, mortage payments and other support processes are planned or already in effect.

Watching Spain

Coronavirus: Flattening the curve successes

From the NY Times: China & South Korea have achieved successes in flattening the curve. China had no new infections in the past 24 hours.

I’ve paid particularly close attention to what’s been happening in Spain, and specifically the Canary Islands, one of Spain’s autonomous regions where tourism accounts for about 36% of its GDP.

Spain’s State of Alarm was announced on 13 March, two days before SA’s National State of Disaster was announced.  What has impressed me about Spain’s response has been that, once the decision was taken, they have moved rapidly and changed decisions as they moved ahead.  Their initial State of Alarm was for 15 days.  The following day it was made indefinite.  On the Canaries, meetings were held on the Monday, communicated to central government, and plans were implemented.

On the Canaries, they have basically locked the whole Island down.  All visitors are being repatriated, in the friendliest possible way so the brand isn’t damaged.  Flights between the Islands and the rest of the world have been drastically reduced (115 daily flights to 18), and only for essential travel.  Aircraft, most of which have six seats in a row, may only carry 2 passengers per row, to allow social distancing.

Everybody has been encouraged to work from home.  By Tuesday, the Minister of Public Administrations announced that about 80% of the public staff of the Autonomous Community work from their homes,  while the remaining 20% ​​have gone to their usual jobs.

The only permitted reasons for being outdoors is to get to or from work, to buy groceries and medicines, to put fuel into a vehicle, to visit elderly or sick, or to walk your dog.  (I love the Spanish!)  Big fines are levied for anyone who transgresses this.  On the first day this was introduced, a couple jogging were the first to be stopped.  Spain is serious about implementing its laws.

On 3 March, the Canaries minister of tourism, industry & commerce had announced that 24 million euros (about R430 million) was  being budgeted for promotion to reactivate their main markets later in the year.

Following their State of Alarm, a trickle of large companies throughout Spain immediately announced that they will be implementing “ERTEs,” a temporary layoff of workers. At least 100,000 people face temporarily losing their jobs.  On the Canaries, the first “ERTEs” came from schools which had been closed, and the layoff period for these was 14 days.

When supplies of hand sanitizer on the Canaries ran out on Monday, the Military Pharmacy was instructed to prepare additional supplies.

On Tuesday, the President of the Canary Islands Government, Ángel Víctor Torres, described the measures adopted by the Central Executive  as “brave”.  It is also the “greatest economic injection ever” made by the central government, motivated by “circumstances that have never been experienced before,” amounting to about 200 billion euros, according to the news website eldia.es.

What is being planned to support South Africa’s economy and citizens?

I spent three days trying to find someone who has a plan.  I contacted the ministries at the national Department of Tourism and Western Cape Department of Economic Opportunities, Wesgro, City of Cape Town, and Cape Town Tourism.  All I found were consultations with stakeholders, workstreams, and lots of talk.

Given the speed which other countries are responding to the crisis, I was appalled.  I had a heated discussion with one politician who rattled off a long list of “plans” because they were no more than engagements.  A plan is not a plan until it has a timeline and budgets.

A Whatsapp voice message from the Western Cape department of economic development & tourism on Tuesday evening said the following: (click on the arrow below)

After a month of work there are no concrete plans or timelines?  Nothing at all?  I’m sorry, that’s not good enough.

Western Cape premier, Alan Winde, in his regular video talk to citizens the following morning had the following to say about tourism,:

This seems somewhat at odds with his economic development & tourism department.

What can you do?  Use the opportunity to completely restart the way we do things…

    • Don’t panic; Don’t despair — it weakens your immune system.  Stop following social media if it upsets you; find friends to discuss your problems with.
    • Look for the positive in the situation you find yourself I and make the most of this time to regroup, innovate and create.
    • Practice strict social distancing — keep people 2 metres away from you.  If you’re in a queue, don’t allow others to stand close.  Retailers (and wherever people have to queue) should be enforcing this.
    • Wash your hands… often.
    • Rather than close down or retrench staff, look at a long winter holiday.  Negotiate UIF payments for staff (which local governments should assist with) so you don’t lose your most important assets.  (Grande Roche Hotel in Paarl used to close for three months every winter when they first opened, because winter wasn’t worth staying open for. UIF was paid immediately so there was no waiting period.)  If you can close for three months, you will be helping the rest of the industry.
    • Re-purpose your business and look for additional income streams.
    • Look for new niche markets.  As Western Cape premier Alan Winde said on Wednesday, “Tourism hasn’t stopped.”
    • Work from home.  In the Canary Islands during their lock down, they found that Estate Agents work as well from home.  If this trend can be magnified, traffic congestion will become a permanent thing of the past and the savings on city rents, travel & parking, and wasted time will only enhance personal lifestyles.
    • Tackle all your New Year’s resolutions for the last 10 years in one go!  Stop smoking and cut down on alcohol — because with COVID-19’s help — they will kill you.  Start an exercise regimen at home (use Youtube for ideas to save money on gym fees) because you need to be fit to beat COVID-19.  Viruses don’t like UV light. They don’t like sunshine.  So do get outside.
    • Broaden your mind.  UCT, amongst others, has excellent online courses.  For leisure, take virtual tours of the world’s great museums. Or a virtual trip on the Orient Express.
    • Country accommodation establishments must promote themselves to city residents… providing they “deep clean” the rooms after every guest leaves; their establishment provides space for social distancing between groups of guests; and follow all necessary protocols.  To retain their sanity, city folk who can afford to travel are going to be looking for safe options.

It really is a crazy and untenable situation when almost the only group who are not economically distressed during the coronavirus crisis are public sector employees.

  • And…  Demand that all political heads and the management of all tourism-related bureaucracies/agencies should have their salaries linked to a tourism index.  So they take pain too when the industry does badly. It really is a crazy and untenable situation when almost the only people who are not economically distressed during the coronavirus crisis are public sector employees.

In 2009/10 to counter World Cup price gouging, and in 2017 during the drought, CapeInfo promoted accommodation establishments which were offering fair prices and those who were independent of their municipal water supplies.

For the current National State of Disaster, we plan to identify accommodation establishments which offer suitable accommodation and commit to the necessary health protocols for country getaways.  Tourism will go on.  As more and more city attractions close, and self-isolation takes grip, city people will need an escape from cities and a healthy dose of space, relaxation and open air.  They might also suitable for guests who want to self-isolate.  The requirements are:

  • Units must be sufficient far apart to ensure that each party of guests does not have to come into contact with other guests.
  • All staff follow rigorous COVID-19 hygiene protocols
  • Alcohol-based sanitisers in each unit
  • Relevant precautionary gear available for all guests and staff
  • Frequent cleaning of regularly touched surfaces and concerted efforts to maintain high hygiene and safety standards
  • Deep cleaning of all rooms after each party of guests leave.

The Spanish peninsula decided to follow the Canaries example and is busy closing all hotels.  As soon as we receive confirmation that nothing similar is planned here, we will write to all CapeInfo’s member establishments inviting them to participate in this promotion.

5 thoughts on “Life goes on… but Hope is not a Strategy

  1. Marco Nicolai

    Is imperative the Government accept in full the memorandum of the DA.
    Where ask for small and medium business don’t pay for at least 4 month all the obligations as Credit cards, Home Loans, Vehicle loans.
    I am in the end of my saving of only 30 Thousand rands and no bookings or potential business in the future soon.
    I will not renew my lease and I will storage my home.
    And live in different places after the storm end.
    If the banks and the government don’t help all my efforts of years of work will be vanished. I will turn 60 next 3 of April and I feel tired and devastated.
    Please SATSA and all the big player have to help to the smaller ones for together can sort this damage.
    Thank you for the opportunity to express My concern in this tragic times.
    With regards

    Marco Nicolai
    Managing Director
    https://www.capetravelonline.com/

    Reply
  2. Christine Lamberth

    Thanks for the newsletter and the thoughts. I have been getting more and more angry at the fact that our government – and business is doing NOTHING to mitigate what is going to be disaster for small business and for their employees. I am frankly quite shocked that the Unions have not started negotiating with government for some relief of some sorts.

    So, here’s my suggestions –

    1. Get all banks to waive service fees for the next two months.
    2. Get landlords to waive rentals for two months.
    3. Get banks to defer mortgage bonds and lease payments and add them to the end of the contract period.
    4. Get Eskom to waive electricity payments and implement a payment scheme to catch up in 60 days time.
    5. Get credit card companies to waive service fees and defer any commission payments owed.
    6. Get insurance companies to waive insurance premiums for 60 days and implement a payment scheme to catch up
    7. Get municipalities to waive rates and taxes for two months and implement a payment scheme to catch up later.

    And if you do all that then small business will be able to probably still pay their employees some part of their salaries and they won’t starve.

    I can’t believe that no one else has thought of this!!!

    I hope you can pass this onto the powers that be.

    Reply
  3. Arno Van Zyl

    So basically all small business owners are on their own? My B&B and my wife’s restaurant WILL go bankrupt and the COCT and Western Cape Government will do nothing to assist? Great to know they have our industry’s back…NOT!!

    Reply
  4. Bertha Holtby

    Thanks for the discussion. We are in Johannesburg Midrand and all of us, being Guest houses are going to lose our business. Everyone has been told – work from home, no local business, international clients can’t fly, no business. We really would love the Country to pull together, like the banks, Vodacom, DSTV – we are trying to keep hygiene, but what about the help for small business. Have cut costs where ever I can – staff cut, crying my eyes out to let staff go, just don’t have any choice. My money will run out in three months time. Please help us. This has only been a week. The thought of it carrying on for four months is going to be devastating for us all. I am running around and cutting costs where ever I can and trying to help my staff where I can. Thanks for listening.

    Reply

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