The impact of COVID-19 on the business sector and labour market in South Africa: a focus on the hospitality industry

ABSTRACT

The purpose of this paper is to explore the impact which was by the Covid-19 pandemic in the hospitality industry of South Africa. South Africa has one of the largest and highest developed hospitality industries in the region. The hospitality sector in South Africa employs 5% of the active age group and contributes around 10.3% revenue income to the government of South Africa. Unfortunately, South Africa emerged as one of the hot spots of the Covid-19 virus infections. As a way of controlling the pandemic, hard lockdowns were introduced starting on the 27th of March 2020. The sealing of the country's port of entries brought the hospitality sector to its knees. This study evaluates impact of Covid-19 on the business sector and the labour market in South Africa focussing on the hospitality industry. The study used secondary data from survey reports from South Africa's National Department of Tourism, (Statssa, Google mobility and other authoritative relevant sources). The study concluded that the pandemic had a devastating effect on areas such as labour, the overall business, the labour market, and the hospitality sector. The most affected areas from the hospitality sector were aviation, maritime, special events, accommodation, hotels, restaurants, lodges, recreational parks, and national parks. When COVID-19 came some businesses in the hospitality sector were servicing loans borrowed from financial institutions. The findings of the study indicated the need for a strong financial backup to cushion business during pandemics for the hospitality sector, tax holidays and adoption of stringent health protocols to assist the industry recovery and make business more profitable. The theoretical implication of the study is that it will expose the impact of COVID-19 on the business sector and the labour market in South Africa with a focus on the hospitality industry, and to map a future mitigatory way to overcome such natural calamities towards the business sector.