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SA Treasury's Cost-Cutting Measures Raise Concerns for Hospitality Industry.


World Tourism Day – 27 September 2023


In a bid to bolster fiscal responsibility and reduce government spending, the South African Treasury has amongst other cost-cutting, implemented restrictions on government travel, conferences, and catering, which is causing significant apprehension within the hospitality industry.


ANEW Hotels & Resorts Sales & Marketing Director, Alan Campbell says although well-intentioned from a fiscal perspective, the decision is of great concern to the hospitality industry.


"The tourism and hospitality industry relies heavily on government-related travel, bookings, and events, playing a pivotal role in sustaining the local hospitality sector. This announcement could jeopardise tourism just as we were recovering from a series of unprecedented challenges, including the COVID-19 pandemic."


South Africa's hospitality industry is not just a critical economic contributor but also one of the largest employers in the country. It provides job opportunities to a diverse range of individuals, from hotel staff to taxi drivers and restaurant workers. Moreover, it holds immense potential for addressing the alarming youth unemployment rate, which stands at 32.6%.


Campbell emphasises, "The industry serves as a gateway for unskilled individuals to enter the workforce, offering opportunities for skills development through in-house training programs and the chance to earn a decent livelihood. However, we are concerned that the Treasury's announcement could jeopardise employment in this sector."


He advocates for a more consultative approach with industry bodies to plan for and assess the long-term consequences of these restrictions and to offer a timeframe within which to adjust. "Collaboration, innovation, and flexibility will be crucial in sustaining the industry and safeguarding jobs and economic growth. "


Government officials, at both the national and provincial levels, frequently engage in various activities such as meetings, conferences, workshops, and official functions, necessitating accommodations, conference facilities, catering services, and transportation. These activities contribute significantly to the revenue streams of hotels, event venues, restaurants, and transportation companies, and secure employment.


"A reduction in government-related travel could lead to a freeze on new appointments, reduced working hours, and the postponement of upskilling programs. This, in turn, would have a detrimental effect on the livelihoods of many and could exacerbate unemployment rates," warns Campbell.


He says the South African Treasury's cost-cutting measures have raised valid concerns within the hospitality industry.


“A collaborative approach, taking into account the industry's critical role in the economy and employment, will be vital to finding a balanced solution that ensures fiscal caution without jeopardising the well-being of those reliant on the hospitality sector. Challenges often spark innovation and resilience; with determination and creativity, we can emerge stronger, creating a sustainable industry for all,” said Campbell.


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