In the next step of “controlling what we can control”, SATSA’s Reimagining the Value Chain Thinktank tackles Cancellations – a critical pressure point that must be solved if the Tourism Sector is to navigate the immediate negative impact of COVID and thrive in a post-COVID world.

If you missed the Reimagining the Value Chain Thinktank’s guiding framework on dealing with deposits and how to save the forward book, click here.

This week’s guiding framework around Cancellations is important if we are to position South Africa and its Tourism Sector as travel friendly and trustworthy and generate demand.

As we compete with other destinations, we must demonstrate a willingness to meet the traveller, who is prepared to take the risk of travelling, halfway. We must also put the cancellation risk into perspective – not everyone who books, will book to cancel.

“Nobody books to cancel. We’ve all been fairly successful in persuading customers to postpone as opposed to cancel and keep that forward book. If it means you have the occasional booking that you have to refund, for the long-term reputation and integrity of our brand, it’s a small price to pay.”

Travel cancellations as a result of COVID will be isolated, so it would be foolish to manage our entire business around risk and then deal with demand. We must manage our business around demand and then deal with the isolated risks.

Cancellations – what’s the problem?

The problem lies in balancing the concerns of the traveller with the concerns of the supplier.

The concern of the traveller is that they may not be able to travel as a result for reasons out of their control, and that they will be stuck with having to pay a cancellation penalty. They would therefore rather not book, and so demand disappears.

The concern of the supplier is that they won’t be able to re-sell their vacant rooms, as well as cover the costs incurred prior to the guest’s arrival.

“There’s a fine balance between being super flexible and a guest cancelling out and you’ve incurred a whole bunch of cost.”

But risk is not a 100% certainty. It’s an equation of the level of impact multiplied by the level of probability of it occurring. What is the level of probability of a cancellation occurring and then the level of impact? How do we share the risk between the industry and the traveller in a way that we can still get demand going?

“If we put ourselves in the shoes of the traveller, the tour operator or the supplier, there’s a risk. When we think about whether a risk is worth taking, it’s worth considering that the following equation is considered – the level of negative impact and the level of probability of this risk occurring. If something is a 10% probability and a minor impact, why not extend very flexible cancellation penalties through times of COVID and improve demand?”

What is the cancellation solution that would encourage travellers who are worried about cancellations, while fairly allocating the impact where that travel can’t occur?

The solution lies in being flexible around cancellations to create an environment which encourages business. This would mean you would allow cancellations up until a period of time close to the arrival, or the day of arrival, or even during the stay.

Whatever the cancellation or non-use penalty then is, must be reasonable taking into account the impact to you, the product, as well as the client’s perception of value.

Here are two suggested guidelines proposed by the Thinktank in terms of dealing with cancellations:

1. Allow travellers to cancel up until the day of arrival based on force majeure reasons as a result of COVID specifically.
2. Allow travellers to cancel up until 48 hours. Whatever the cancellation fee, it must reasonable and transparency is important.

Four principles apply in this guiding framework:

We are talking about cancellations only where the cancellation is due to circumstances outside of the traveller’s control due to COVID.

We propose

1. Be flexible – around cancellation period timing.
2. Be reasonable – if a penalty is going to apply, it should be ‘reasonable’.
3. Be transparent – explain the reasoning.
4. Communicate your cancellation policy clearly.

“The principle has to be around flexibility. Be as flexible as you will allow. The risk is that if you’re not flexible enough you’re not going to get any customers, so which is more important?”

“The general recommendation should be: Make it as flexible and easy as possible and rather get something, rather than nothing. We’re competing with the rest of the world.”

How you play the game at this time determines whether you will have a game afterwards. You can destroy your destination’s reputation in the way that you handle this existing situation. It’s important to realise that if there’s no demand, there’s no game.

“South Africa has an extraordinary opportunity to drive business. We have to be flexible to address the concerns of our travellers and make our destination totally tourism friendly. On those occasional times, we might lose a bit of business, but at least we’re in the game. If we’re not in the game, we’ve got nothing.”

“We’ve got to take a big-picture on this thing and get in the game. It’s our one opportunity.”

“We have to create the demand that we have the most lenient cancellation policies and we’ve done that now with deposit policies, which makes us an attractive destination.”

South African National Parks (SANParks) has advised customers that it has not opened for overnight accommodation as per Level 3 lockdown regulations on leisure and interprovincial travel.

Day self-drives in national parks continue to be permissible for residents of the various provinces that the respective National Parks are located in; visitors are urged to book online and to observe all COVID-19 health protocols while in the park – including exiting the park with as much of their refuse as hygienically possible.

Fundisile Mketeni, SANParks Chief Executive Officer acknowledged that the organization is aware that many domestic tourists are eager to enjoy the tranquillity offered by national parks and that they would like to extend the current self-drive opportunities to overnight stays. He urged tourists to be patient until leisure travel and interprovincial travel regulations are implemented.

All overnight bookings for July have therefore been suspended; the public will be advised in due course when bookings open. The organization advised those with overnight bookings to delay their travel and not cancel.

Mketeni concluded by advising South Africans to continue supporting government efforts to minimize the impact of COVID-19 by adhering to lockdown rules. “We are seeing increasing infection numbers and regrettably the loss of lives as well. This is a reminder that a decision to open up our facilities has to be well-considered to ensure our colleagues, tourists and their friends and families’ health are not compromised. We all have to be patient and trust the processes and decisions of our leaders during this difficult time, we will announce the dates for the reopening of accommodation bookings in due course”.

We have been getting a number of consumers enquires as to which businesses are currently open. To assist you with marketing this we would like to create a page on the SATSA website that lists all the open businesses.
 
To appear on the webpage, please reply to this email with your company name to indicate that you are open. You would also need to ensure that your SATSA mini website is updated. If you need your login details again, please email Pat Lister on support@satsa.com.
 
Looking forward to hearing from you.

In some ways we move forward, in others we take two steps backward. The release of Advanced Level 3 Regulations for South Africa gave us a small glimmer of hope that leisure travel within province at least would be allowed.

Only to have that flicker extinguished by Tourism Minister Mmamoloko Kubayi-Ngubane during a press briefing stating “no domestic leisure whatsoever” under these new regulations. Law is law, however. The regulations make no exclusion for intra-provincial (within province) domestic leisure travel, despite the National Department of Tourism’s interpretation. Until industry receives official written confirmation to the contrary, leisure travel and overnight stays within provinces, in our view, is allowed.

You may ask why it’s important to fixate on intra-provincial domestic leisure being reopened when, in fact, we really need international inbound tourism for our survival. Global tourism destinations have all gone down this path – opening domestic first, followed by regional, followed by select international.

Opening up domestic leisure travel gives us an opportunity to implement and fine-tune the health and safety protocols we’ve put in place to keep guests and staff safe. And right now, that delicate balancing act between saving lives and preserving livelihoods is so important, when one considers that South Africa has yet to reach its peak in infections.

Remember, you can get involved by:

• Sending your positive destination news, images and videos (not a
  product push) to info@traveltosouthafrica.org.
• Liking, following and sharing from our Facebook, LinkedIn, Instagram and Twitter pages
• Tagging your social media with the hashtag #SouthAfricaisTravelReady
• Tipping us off if you see any publicity on tourism and South Africa –
  info@traveltosouthafrica.org
• Signing up for a weekly round-up of news that you can use to send to your customers and guests (newsletter sign-up in the footer of SA is
  Travel Ready website)
• Sharing our positive stories about Destination South Africa on the SA is
• Travel Ready website with your networks – customers, guests
• Encouraging your networks to amplify the #SouthAfricaisTravelReady
  hashtag
• If you are a property or experience, hosting an influencer or journalist
  by registering your interest with info@traveltosouthafrica.org

What’s New?

Lives vs livelihoods

Regardless of the confusion surrounding whether domestic leisure of any sort is allowed, the phased reopening of tourism in South Africa requires must take place in a responsible and phased manner, under robust health and safety protocols that have been informed by global best practice.

Virgin Atlantic flies to Jozi from September

Virgin Atlantic advises it will recommence its Johannesburg to London operation from 15 September 2020. The Johannesburg – London Heathrow flight connects seamlessly to a range of destinations in the USA including New York, Washington and Miami.

South Africa prepares to welcome the world again

As South Africa’s government mulls its reopening of borders in September, South Africa’s tourism industry, under the banner of the Tourism Business Council of South Africa (TBCSA), has been advocating for the phased reopening and is putting stringent measures in place to lower the risk and ensure the safety of travellers.

Kruger, Cape Town among 50 most popular places to visit after lockdown

Big 7 Travel has included Kruger National Park and Cape Town on its list of the 50 most popular destinations people want to visit post-lockdown. The list is based on searches on their site, surveys sent to its audience on social media, as well as trending holiday locations.

Launching Mzansi Tourism Champions

In true South African grit and gees, Mzansi Tourism Champions is a recently launched platform dedicated to championing the needs of those working in the tourism field. This innovative space is perfect for those looking to share information and advice – or offer support in challenging times.

Experiences to Share

Endangered Wildlife Trust Wild Chat The Endangered Wildlife Trust is hosting Wild Chats to offer entertaining conservation conversations. EWT has invited specialists in their fields to discuss a range of topics on a live stream. Attendees can also engage with the speaker and ask questions.

Getting Travel Ready – navigating our airports

Watch SouthernXplorer Tours and Hello Adventure show how local tourism business are preparing to be travel ready. In this edition, they navigate Cape Town International Airport.

Loving Local Looking for some great video content about South Africa to share? Check out these nifty short clips of South Africa’s nine provinces by SA Tourism. A great, quick slice of heaven on YouTube to share with your customers.

Industry leaders on camera

Check out our SA is Travel Ready YouTube Channel for short video clips by industry leaders unpacking the impact of COVID-19 on tourism, what we are doing as an industry to get ready and why South Africa is Travel Ready.

The Statistics, Insights and Analytics (SIA) team at SA Tourism recently released a report containing themes from their Dipstick online non-probability convenience sampling survey on international tourists. The focus of this exploratory study was to solicit views of international tourists who have visited SA in the past 5 years, on travelling post COVID-19.

Despite the restrictions, consumers are itching to be outside and interact with the world again.

Main findings:

• International destinations are the preferred choice among seasoned international travellers.
• Millennials will be the first tourists to travel with a greater eagerness to travel and a perceived lower vulnerability for COVID-19.
  The SIA team also finalised the 2019 tourism performance report for international and domestic.

The report focussed on:

• Total Arrivals/Trips
• Spend
• Length of Stay
• Bed nights
• Geographic Spread

The report is loaded here The link to the pdf is here

The article is here

The SIA team intends to do a more detailed study later in the year.

CEO of the Tourism Business Council (TBCSA), Tshifhiwa Tshivhengwa, has appealed to Finance Minister Tito Mboweni and government to intervene in the tourism industry’s dispute with insurance companies not paying out Covid-19 pandemic claims.

According to a report published by Moneyweb on 1 July 2020, Tshivhengwa who was speaking during a web media briefing on the dispute, together with affected tourism businesses and loss adjustment firm Insurance Claims Africa (ICA), said it was time for the Finance Minister or government to get involved to ensure insurance groups comply and payout urgently.

“The government needs to come to the party now as they gave instruction around the Covid-19 lockdown… The tourism industry is in a corner and may have to take drastic decisions to survive, like the taxi industry,” Tshivhengwa was quoted as saying.

Tshivhengwa added that most of the tourism industry, which employs some 700 000 people directly, is still not operational due to restrictions to trade, including bans on inter-provincial travel. He said the fact that hundreds of tourism businesses such as B&Bs, lodges, hotels, eventing venues and restaurants were not being paid out business interruption insurance claims, added to the industry’s woes.

To read the full report published by Moneyweb, click here.

To view a recording of the media briefing on YouTube, click here.

Airlink will from Monday 6 July 2020 expand its domestic network connecting customers for business and essential service travel to other inland and coastal cities. We have added flights between Johannesburg and Bloemfontein, Nelspruit KMIA, Upington and Pietermaritzburg as well as Cape Town to Bloemfontein and Cape Town to Port Elizabeth.

To view our schedule visit https://www.flyairlink.com/flightschedule or book your 4Z flights direct on www.flyairlink.com or contact your booking agent. In the next few weeks the airline is expecting additional airports to be approved and added to our operations, these include Kimberley, Mthatha, Polokwane, Richards Bay as well as Cape Town to George.

Airlink in a statement said that the safety and well being of its customers employees and aircraft are its top priority.

Here are 6 Important items to remember before travellers head to the airport: Face Mask, Ticket or Mobile Boarding Pass, ID/Passport/Driver’s License, Completed Travel Permit, Completed Health Questionnaire and travellers should arrive two hours before their flight to complete the Airport Hygiene Protocol formalities and to ensure that they are not rushed.

Read more and download the Travel Permit Health Questionnaire on
https://www.flyairlink.com/covid-19-travel-updates#healthandsafetyproto

The COVID-19 pandemic has upended our normality and in such instances, people tend to feel that they have lost some control. Of course, there are certain things for which we are reliant on Government, for example, a date for reopening the tourism sector. And to that end, SATSA is working fervently, through the TBCSA, to make this happen.

However, in the spirit of “controlling what you can control”, if there are two things you have the power to do something about or at least start thinking about this week, if you haven’t done so already, it is:

1. Saving South Africa’s forward book for our upcoming peak season
2. Reducing or removing the customer’s ‘fear’ around new booking confirmations

Saving South Africa’s forward book

We are fast reaching the 60-day booking confirmation window for September travel, the start of our peak season.

While a date has yet to be set for the opening of our borders, there is fervent lobbying behind the scenes backed up with a data-driven recovery strategy and robust health and safety protocols to ensure a safe phased reigniting of inbound international travel.

But until that date is set, customers will be wary of confirming bookings. So while those customers, who are scheduled to travel in September and October, may well be able to travel, the requirement to confirm their booking 60 days out without confirmation that borders will be open means they will simply defer or cancel their travel.

According to a TBCSA survey at the end of May to establish the current forward book value, the 105 inbound and DMC respondents held a forward book for South African business for the 6 months September 2020 to February 2021 to the value of R771 million, which represents 40% of their budgeted R1,9bn turnover for the period.

Most businesses were still holding bookings for travel starting in the next few months with 13% holding from July, 17% from August, 19% from September and 20% from October. Only 12% have cancelled or postponed all bookings till 2021.

By instituting more flexible booking policies in the short term and shortening your cancellation penalty periods to 30 days or even 15 days prior to travel, you allow customers and guests the space and confidence to retain their September bookings in the short-term while we await confirmation of our reopening date.

Remove the ‘fear’ around new booking confirmations

SATSA members have been asking for some guidance on issues within the Value Chain in times of COVID-19 and beyond. In the absence of clarity and divergent opinions, even between members from the same sector, we undertook to navigate these murky waters on behalf of our members through webinars and our SATSA Discourse, among others.

To forge a consensus, we convened a SATSA thinktank last week around reimagining the value chain in times of COVID-19 and beyond. It included leading DMCs, direct sellers and accommodation representatives and unpacked the issue of deposits and pre-payments, the ‘fear’ around these which hinders demand, the root causes of that ‘fear’ and possible solutions.

The thinktank’s opinion is that the requirement for any form of non-refundable deposit will, therefore, remain an impediment to demand because the guest and or customer is unsure whether their deposit will be returned to them should they need to cancel as a result of COVID reasons.

This is because they are not convinced everyone in the chain is going to survive this and/or because the pre-COVID response was not consumer-friendly. There is real ‘fear’ which is an impediment to them booking.

By removing the ‘fear’ around the refunding of customer and guests’ deposit, we will drive confidence and demand.

We can remove that ‘fear’ by offering a full refund for any COVID-related cancellations and there are two potential ways of doing this:

• Require guests to pay a refundable deposit on confirmation:
  o Define clearly that deposits will be refunded in full in cases of force majeure relating to COVID-19
  o Define that deposits will not be refunded in cases of ‘disinclination’ to travel
  o Provide proof of solvency through audited statements (Customer trust)
  o Different approach or flexibility for ‘regular’ vs ‘unknown’ customers and contractual B2B versus ad hoc B2C customers- Reward regulars and volume
  o DMC has to pass liability and payment demands on to customers
  o A hybrid approach to paying refundable deposits to suppliers, e.g. deposits to be paid to secure a booking in cases where the supplier can a replace that provisional booking with a confirmed booking
  o Suggested transparency in terms of how the deposit is split between conservation and community vs tourism (accommodation)
• Don’t require guests to pay a deposit on confirmation, then manage your risk:
  o Understand your contractual obligations
  o Different approach or flexibility for ‘regular’ vs ‘unknown’ customers and contractual B2B versus ad hoc B2C customers – Reward regulars and volume
  o Only require deposit to secure a booking in high-demand periods (i.e. when inventory can be confirmed elsewhere)
  o Ringfence the deposit (the guest puts the deposit in trust)Endorsed by:
  An African Anthology, Cullinan Holdings, Fancourt, Go2Africa, Kobo Safaris, Micato Safaris, Ondese Safaris, Private Safaris, TSC Group, Tswalu Kalahari, Wild Wings Safaris. Will you add your voice to this collective? Email communications@satsa.co.za

The rest of the world is starting to open up, and part of that opening up and the normalisation of COVID means our traditional source markets are starting to think about where they’re going to travel to and plan.

Traditionally, we have relied heavily on DMOs, such as South African Tourism to do our marketing for the destination. In this new world, there is a distinct shift in how we’re going to compete with other destinations and the ease of booking is one key aspect. This is a suggested approach, but will only become meaningful if we can support it as a collective.

David Ryan from Rhino Africa reports definite increased interest in travelling to Africa, especially from source markets like Spain, Germany and North America. He says clients are looking for more certainty around the eco-system and booking conditions.

Simply by offering a more flexible booking policy, Rhino Africa has been able to drive demand and conversion.

While Industry lobbies strongly for the lifting of Government-imposed travel bans, there’s an opportunity for us to align our T&Cs to provide greater certainty that if the customer or guest has to travel as a result of COVID-19, they will be covered.

The more flexible our cancellation policies are for the remainder of 2020, the less likely that travellers will cancel for fear of incurring fees, particularly for September and October. It must surely be in everyone’s interest to hold onto confirmed bookings as long as possible, to allow the fluid situation of inbound travel opening up to unfold.

In the absence of official written clarity declaring the contrary, SATSA supports the position taken by the Tourism Business Council of South Africa on the interpretation of advanced Level 3 regulations that “formally accredited and licenced accommodation” be allowed to operate for intra-provincial (within province) domestic leisure travel.

“As is good and proper, we fully endorse the position of and take our lead from the TBCSA, our apex association, with which we have been working closely throughout this COVID-19 crisis,” says David Frost.

According to the TBCSA, there is lack of clarity regarding the interpretation of the recently released COGTA regulations. The interpretation the TBCSA has taken is that intra-provincial domestic leisure overnight stays (excluding home-sharing) is acceptable, provided the requisite health and safety protocols are instituted by accommodation establishments.

“Until we have written confirmation to the contrary, we are entitled to this interpretation and will operate within the regulations we have received,” confirms TBCSA CEO Tshifhiwa Tshivenghwa.

With the phased reopening of tourism, it is essential that we balance saving lives and preserving livelihoods. “We are sensitive to the absolute critical balance needed to control the spread of COVID-19 to save lives, while also trying to save the over 1.15 million jobs that are at risk if the Tourism Sector does not reopen before the end of the year,” says Frost.

As the President announced in his address on 17 June: “There is a limit to how long these businesses can be closed” but our reopening must be underpinned by the stringent health and safety protocols we have developed as an industry, through the TBCSA, and based on international best practice to safeguard our staff and guests.

“We are aligned as industry to implement, fine tune and improve on the operating protocols that we have developed as we lobby for a phased reopening of international inbound tourism as close to September as possible, thus delivering on the President’s call to balance lives and livelihoods,” concludes Frost.