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SA tourism sector jobs plummet by almost a million

‘The sector went from supporting 1.6 million jobs in 2018 to 640 000 in 2020,’ with women being most affected: Mia Slabber – economist, Bureau for Economic Research.

FIFI PETERS: As the world celebrates International Tourism Day today, the spirit of hundreds and thousands of workers in South Africa’s tourism sector who have been left jobless over the past 18 months is less joyful. The sector went from supporting 1.6 million jobs in 2018 to 640 000 in 2020, according to research recently published by the Bureau for Economic Research, or BER.

We have Mia Slabber, economist at the BER, to talk to us more about this story. Mia, thanks so much for joining the Market Update. Employment in the tourism sector essentially has declined by more than half since 2018. Are we blaming this all on Covid-19?

MIA SLABBER: It’s important to firstly emphasise that this isn’t only jobs in the tourism sector, this is if we apply the loss in revenue in the sector to the economy as a whole. So the tourism sector, as we know, has a very extensive value chain with lots of linkages throughout the economy. So if we apply the loss in revenue and look at what the economy-wide impact was, there was a loss of almost a million jobs. This isn’t only jobs in the tourism sector, this is jobs along the value chain. I firstly wanted to clarify that.

But yes, definitely; last year we saw a large drop in visitors, especially in our international visitors. It was more than a 70% loss in visitors from our international markets and, in terms of domestic trips, we saw a more than 50% drop in domestic trips. There are of course severe revenue losses as a consequence – and owing to the loss of revenue we’ve seen a lot of job losses.

FIFI PETERS: What kind of jobs are we talking about here that were lost?

MIA SLABBER: This is all based on expenditure data that we’ve now extrapolated to translate into job losses. Unfortunately, my data doesn’t give a breakdown of the sectors. But if you compare my results with the official stats – it’s a quarterly labour force survey – so if you look at the changes in levels of jobs between the final quarter of 2019 and the first quarter of 2021, there’s been a loss of 1.4 million jobs throughout the South African economy. Here we see large losses in the trade sectors, which include your retail sector, accommodation, and restaurants, basically your hospitality industry. We’re also seeing large job losses in community and social services. So that would include all your recreational activities or your cultural and sports activities. That’s where we are seeing the most job losses.

FIFI PETERS: I don’t know if your research went as far as looking at the job losses by gender, but the official numbers do tell us that women were the hardest hit throughout the pandemic in terms of loss of employment. I wonder if your research would have found a similar trend?

MIA SLABBER: Unfortunately my data wasn’t that granular, so I couldn’t make any conclusions on gender. But yes, if we look at the … data I think one of the findings there was that women were most affected, and this would make sense. Women are most of the time the primary caregivers of children, and the children couldn’t go to school, so women also stayed at home. I think there’s enough anecdotal evidence at least that a lot of job losses were among women.

FIFI PETERS: But just talk to us more specifically on the tourism sector and the entire value chain that surrounds it, in terms of what the picture looks like today compared to before the pandemic hit, by way of the contribution the sector presently makes to GDP from its previous contribution.

MIA SLABBER: Right at the start of the pandemic we did an economic impact assessment. Here we used expenditure data. The satellite accounts from Stats SA give us internal tourism expenditure, so that’s not expenditure from our domestic tourists as well as our inbound tourists. Basically we took that; it was R273 billion in 2018 – and then you do a multiplier analysis. Because of the value chain, you can’t just look at the tourism sector and its spending in isolation, you also have to take all these linkages into account. A multiplier analysis allows you to also take the indirect and induced impacts into account.

In 2018, based on the spending, the tourism sector contributed 7.2% to total GDP and supported 1.6 million jobs throughout the economy. The only data that we really have for 2020 is the decline in trips – domestic trips and international visitors. We applied those ratios to the expenditure data of 2018, and that resulted in women were most affected due to all these linkages. This implies that the contribution to GDP declined from 7.2% to 2.9% in 2020. And then, like you mentioned, the ‘jobs supported’ declined by almost a million.

FIFI PETERS: R164 billion – that’s a huge, a phenomenal amount. Would you say that most of the damage has been done from a domestic tourism perspective? We are seeing a lot of airlines that have returned to the skies, from our low-cost carriers to our national carriers, and we are seeing a resumption, as it were, of regional travel – even within the continent. Would you say that these happenings signal that the bulk of the damage is done?

MIA SLABBER: Yes. I think the recovery that we are seeing in the sector is really currently coming from that the domestic and the regional market. If, for example, we look at the accommodation incomes from Stats SA we see a gradual improvement since last year – let’s say August. I think in late July the interprovincial borders were opened and then in October we had the opening of the international borders. So there we’ve seen a gradual uptick in income – if we can use that as a proxy for the sector.

This thing fell back in January after the detection of the beta variant. You’ll remember at that stage it was still called the ‘South African variant’ and that did a lot of damage to our sector.

And then since February we’ve seen another gradual uptick until June. Then unfortunately the latest data for July shows some sharp declines. That was, I think, due to a combination of factors. At the end of June we had the strict lockdown restrictions – and here I’m thinking specifically of the closure of the Gauteng borders for leisure travel. We had an initial ban on sit-down meals at restaurants, we had the alcohol ban. And then also in July we had the unrest in KwaZulu-Natal and parts of Gauteng province. So I think the combination there did great damage to the tourism sector, also on a domestic front or in terms of domestic trips.

That’s the latest data available, but hopefully as the summer season and holiday season approach, and as we vaccinate more people, we will continue to see a recovery in our domestic and regional markets.

And then of course we are really looking for international visitors, especially from the traditional high-spending source markets. Here I’m thinking about the US, UK and Europe. We remain on the UK’s Red List, and until that changes we want to see a lot of or any visitors from the UK, but we are I think to see some visitors from the US and from Europe for the summer season.

FIFI PETERS: Just on the UK, how much of a setback potentially could this be for our tourism sector’s recovery – the fact that we remain on their Red List?

MIA SLABBER: If we look at absolute numbers, we traditionally have received more or less 5% of our international visitors from the UK. That sounds small in terms of numbers, but think about the spending power of these visitors – unfortunately I can’t quantify that.

FIFI PETERS: Definitely a sizeable knock to our rand.

MIA SLABBER: But it’s definitely a sizeable knock to our inbound tourism revenue.

FIFI PETERS: Yes, I think that the industry and the entire value chain are keenly awaiting a revision of that, as it has tried to spur its recovery.

But Mia, we’ll leave it there for now. Thanks so much for your time, ma’am. Mia Slabber is economist at the BER.

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Government is not at fault here. They have to follow the “RULES” set out by the WHO. That means lockdowns, vaccine mandates and a myriad of other restrictions.

If they don’t follow these rules, then South Africa becomes a pariah state. No airlines are willing to fly here and South Africans are not allowed in anywhere in the world. A throwback to the 80’s.

Which is why the UK’s decision to keep us on their red list is so bizarre. But at least many other countries are still open to South Africa.

A Pariah state???? You mean like Junk status, Broke country, Corruption central, losing policies (BEE) Onerous business regulations, and the fact that the ruling party, which helps the poor, helps millions more they made poor??? Where would one get that idea??????????

Hey EFF Commissar,
Government is clearly at fault for reserving and providing financial relief to only BEE tourist related businesses.
How equitable is that?

Hi EFF Commissioner ,
Sweden certainly has not followed the ” rules ” of the WHO . They were smart enough and did not destroy their economy. Do you believe that no airlines are flying to and from Sweden ? Really ?
By the way , South Africa is already seen by a lot of people that used to visit as a criminal dump with a corrupt government , a useless police force and plenty of inhabitants that behave in a savage like manner at the drop of a hat.

…except that our Govt thought that they’re a first world, developed country….and tried to SPEND the same as a first world country.

Now this 3rd world country’s economy is dead in the water. Viva!

(@EFF. Is that you “Dadape”?)

1.6million jobs x R620,000 investment per job = R992,000,000,000 GDP lost
Right now South Africa has 4,530,000,000,000 which roughly equates to an employment count of 7,306,451 persons.

Basically loosing about 22% of our employed persons, that is a huge deal.

In Summary, the South African Government is the larget employer with about 30,000,000 on its books as Anyone who received money from the government can be considered an employee.

End of comments.

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