SA hospitality sector files claims for losses

Hundreds of businesses in the tourism and hospitality industry have submitted claims for Covid-19-related losses.

Insurance Claims Africa believes they should be covered. But some insurers say government regulations, not the pandemic, caused the losses.

Rejected Covid-19 insurance claims are increasingly affecting the South African tourism and hospitality sector, with hundreds of claimants saying they should be covered under business interruption.

This is according to Ryan Woolley, CEO of Insurance Claims Africa (ICA).

The specialist public loss adjustment firm has over 400 claimants in this sector, who believe they should be covered under the business interruption extension of their insurance cover. This kind of insurance cover is supposed to help companies survive following an unanticipated event.

However, some insurers say that government regulations in respect of the lockdown are the cause of the loss, not Covid-19.

The tourism and hospitality sector sustains over 740 000 direct and 1.5 million indirect jobs and in 2018, contributed billions of rand to the South African economy.

Since March 2020, when the Covid-19 outbreak occurred and the national quarantine lockdown was imposed, tourism and hospitality businesses of all sizes have suffered losses, many even forced to close their doors permanently, Woolley says.

Estimations vary on when the SA industry will be fully functional again, with some projections estimating it will be as late as February next year. Insurance Claims Africa is engaging with the Financial Services Conduct Authority (FCSA) about the number of claims being rejected. Wolley says:

“We hope the FSCA will act in the interests of the policyholders who desperately need the policy payouts…to support their staff and meet their fixed costs.”

Working tirelessly
South Africa’s tourism sector is working tirelessly preparing to welcome tourists back to the country, while, at the same time, being mindful of evolving customer preferences, says Sisa Ntshona, CEO of South African Tourism.

“While no one has definitive answers about the future of travel . . . we allow ourselves to be driven by what the traveller wants, as that gives us leverage to pre-empt preferences in the interest of seamless traveller experiences, with safety at the forefront,” he said on Tuesday.

“It, therefore, becomes important to consider what post-Covid-19 travel will look like. What is going to drive, influence and motivate travel decision-making post-Covid-19? These are important questions to tackle because it is a matter of time before the restrictions end and we can discover new destinations.”

For example, it is expected that many travellers will prefer to spend time outdoors in nature, away from crowded spaces.

“The traveller of the future is likely to prefer staycations and houses instead of hotels,” says Ntshona.

In South Africa, domestic, regional and international travel is set to resume in different stages. Domestic business travel has been allowed since the country went to Lockdown level 3 at the beginning of June.

Ntshona points out that, when SA’s lockdown strategy and levels were originally announced, the tourism sector was placed at alert Level 1 with some operations permissible at alert Level 2.

“Following industry-wide engagements, the sector’s phased reopening commenced at Level 3 on 1 June 2020. Therefore, domestic tourism has opened for business travel and other limited activities, with partial domestic air travel for business purposes allowed,” says Ntshona.

Proactive initiatives
“This move is largely thanks to the sector’s proactive initiatives to de-risk itself. In this regard, the sector is taking the necessary steps to embed standardised and evidence-based health and safety measures at all touchpoints in the tourism value chain.

“This will go a long way in laying a foundation for a stronger and sustainable tourism sector.”

Health and safety will remain top of mind for the tourism industry to reassurance travellers of sector-wide health and safety protocols and standards, which, in turn, will boost traveller confidence.

The Travel and Tourism Industry Standard Protocols for Covid-19 Operations was developed through the Tourism Business Council of South Africa (TBCSA) to minimise the spread of the coronavirus.

These include the designation of Covid-19 health and safety officers and team leaders, requiring guests, visitors, passengers and clients to complete medical and travel declarations, compulsory temperature monitoring and standard physical distancing and capacity controls. Government has a R200 million coronavirus tourism relief fund, capped at R50 000 per business, in place. It also recently approved an additional R30 million in relief for tour guides. — News24.