IMPACT OF COVID-19 ON AFRICA MARKET

It is an unprecedented time. As a result of the COVID-19 global pandemic, many countries have implemented restrictions on entry and exit, visa and work permit issuance, closed borders, tightened quarantine rules, and taken other measures in an attempt to slow the spread of COVID-19. These restrictions have affected international business travel and assignment plans. We are proud to see that our hospitality and leisure clients, being the first ones that experienced the severe weather, are moving quickly and remain focused to understand and quantify the operational and financial impact for their business. The impact is enormous, and not yet predictable, on both revenue and supply chains. Decisions being taken to shut down hotels, restaurants, theme parks, cinemas, not to mention the entire disruptive effect of the travel ecosystem, all have a significant impact on worldwide tourism. 

According to data from STR, Hotels in Africa reported steep declines across the three key performance metrics in March 2020, reservations plummeted from early March onwards.

March 2020 vs. March 2019

• Occupancy: -51.6% to 31.1%
• ADR: -6.4% to US$102.09
• RevPAR: -54.7% to US$31.72

Africa saw its lowest absolute occupancy and RevPAR levels for any month on record.

The Impact of COVID 19 intensified during the month of April 2020 and the business will solely depend on the intensity of travel restrictions, not only within African counties but equally dependent on the source market and international travel restrictions.

As per the Tourism sector report 2019, America was the largest western tourism source for African Market, followed by UK, India, China, Germany, France, and Italy.

International tourists contribute over 70% to tourism, rest nearly 30% of tourism depends on the domestic market.

The post-COVID-19 era will initially depend on domestic travelers and as international traveling restrictions get eased from the host and source countries, we will see the contribution increasing from the international market.

There is some pleasant news coming in from the source countries such as Austria, the Czech Republic, Denmark, Germany, Italy, and Spain. These are some first European countries that have eased their most severe restrictions, and occupancies saw an uptick in the last couple of weeks within these countries, however, international travel restrictions not eased as of now.

To further understand the extent to which COVID-19 will affect property or group, hoteliers must evaluate their position and develop plans at a corporate and property level. Hoteliers with a majority of their business originating from one travel market need to diversify their marketing activities to attract new customers.

When travel bans are released, tourist arrivals will rebound, and hoteliers will have greater opportunities.