Following President Cyril Ramaphosa’s announcement of a nationwide lockdown on 23 March 2020, which will come into effect at midnight on 26 March 2020, the tourism sector has braced itself for even greater financial losses on top of those suffered by the current travel restrictions.
The Minister of Tourism, Mmamoloko Kubayi-Ngubane, issued a press statement acknowledging the severity of the problem; “The impact of these measures on big business as well as small, micro and medium enterprises (SMME) will be devastating and will vary in accordance with the size of the enterprise in short to medium term. The nature of SMMEs is such that the dearth of business activities for more than a month, could spell the end for such enterprises.”
“We are committed to putting people and their well-being first, ahead of profits as part of a response to COVID-19. At the same time, we are committed to see the sector being able to pick up the pieces post the COVID-19, thus our role will be to respond and support the industry during this period,” she added.
“The Department of Tourism has made R200 million available to assist SMMEs in the tourism and hospitality sector who are under particular stress.”
Government is therefore working with all stakeholders to find short-term measures to bring relief to affected businesses. In addition, the Department of Tourism has made R200 million available to assist SMMEs in the tourism and hospitality sector who are under particular stress.
The fund will be used to benefit SMMEs in all nine provinces, including:
- Accommodation: Hotels; Resort properties and Bed and Breakfast (B&B’s)
- Hospitality and Related Services: Restaurants (not attached to hotels); Conference (not attached to hotels), Professional catering; Attractions
- Travel and Related Services: Tour operators; Travel agents; Tourist guides; Car rental companies; and Coach Operators.
To qualify for assistance from this fund, the Department will assess applications based on meeting the following criteria:
- Be a formally registered business with Companies and Intellectual Property Commission (CIPC).
- Turnover must not exceed R2.5 million per year.
- Have a valid tax clearance certificate.
- Guaranteed employment for a minimum number of staff for a period of 3 months.
- Proof of minimum wage compliance.
- Provide proof of UIF registration for employees employed by the business.
- Be an existing tourism-specific establishment as outline in the scope of application (suppliers and intermediaries are not eligible).
- Be in existence for at least one business financial year.
- Prove that the relief is required as a result of the impact of COVID-19.
- Submit statements of financial position; over 12 months’ bank statement, balance sheet, income statements, cash flow statements.
- Indicate the intended use of the resources.
The fund will also be allocated according to the following delivery mechanisms, to be as fair and equitable as possible:
- The relief will be distributed in a spatially equitable manner to ensure that all provinces benefit.
- At least 70% of beneficiaries will be businesses that are Black owned.
- At least 50% of beneficiaries will be businesses that are women owned.
- At least 30% of beneficiaries will be businesses that are youth owned.
- At least 4% of beneficiaries will be businesses that are owned by people with disabilities.
A Tourism Services Call Centre is being set up, in order to assist affected businesses with information on the available relief measures, as well as on postponements of events and to act as a helpline for tourists.
To read the full press release, click here.