That’s why municipalities need to add a new category for hotels to their property classifications, charging rates and utilities fees that still cover their costs, but that don’t exploit hotels at the expense of job creation.
This change would be an immensely welcome boost to the sustainability of the hotel industry, which was plausibly the worst affected by the pandemic. While industry continued to manufacture, and retail continued to trade, the country’s hotels were forced to close. Even when they reopened, it was only to 25% or lower occupancy rates – and without the income boost from international tourists.
It is true that South Africa’s hotel sector had its highest occupancy rate in March this year since the beginning of the pandemic. However, it is also true that most hotels are charging the same rack rates as they were in 2019 – even though Eskom’s rates have gone up significantly every year, and municipalities’ rates have increased annually too.
Those that would like to reopen and welcome their former employees back simply cannot, because their municipal rates and utilities costs are just too prohibitive. This means that the hotel businesses that still owe municipalities money despite having closed their doors, will never reopen – and the municipalities are unlikely to ever see the money that is owed to them.
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