The COVID-19 pandemic and guesthouses in South Africa: Economic impacts and recovery measures

Figures & data

Table 1. Guesthouse characteristics (N=181).

Characteristics		Frequency	Percentage
	Two-star	3	1.7
	Three-star	59	32.6
	Four-star	92	50.8
	Five star	10	5.5
	Ungraded	17	9.4
Years in operation	Less than five years	27	14.9
	5–10 years	26	14.4
	11–15 years	58	32.0
	16–20 years	32	17.7
	21–25 years	27	14.9
	More than 25 years	11	6.1
Number of employees	Less than ten employees	149	82.3
	11–30 employees	27	14.9
	31–60 employees	5	2.8

Table 2. The economic effect of COVID-19 on guesthouses (N=181).

Variables		Percentage
Current status of guesthouse during lockdown	Partially operating since lockdown	15.5
	It was closed but now partially operating	53.6
	Not currently operating but will re-open	21.5
	No longer operating and will be permanently closed	3.3
	Permitted site to be used for COVID-19 purposes	6.1
Level of disruption	Somewhat disruptive	1.7
	Unsure	2.2
	Very disruptive	96.1
Impact on income	Moderate decrease in income	2.8
	A significant decrease in income	48.1
	No income at all	49.2
Percentage decline in revenue for the same period last year	Up 10 10% decline	0.6
	11% to 25% decline	1.1
	26% to 50% decline	3.9
	51%to 75% decline	14.4
	More than 75% decline	74.6
	Unsure	5.0
	Not applicable	0.6
Monthly carrying costs of the establishment	Less than R50 000	27.6
	Between R50 000 and R100 000	40.3
	Between 100 001 and R300 000	27.6
	More than R300 000	4.4
The ability of the establishment to currently service its debts	Yes, fully	9.4
	Yes, partially	28.7
	No	51.9
	Don’t know	2.8
	Not applicable	7.2
Risk of bankruptcy due to the COVID-19 pandemic	Likely	61.9
	Unlikely	12.7
	Unsure	25.4
Duration of remaining a viable business under current COVD-19 situation	Impossible to say	33.1
	Less than one month	9.9
	1–3 months	32.0
	4–6 months	16.0
	More than six months	8.8
Possible duration for recovery from COVID-19	Less than one year	6.1
	1–2 years	45.9
	3–5 years	34.3
	6–10 years	6.1
	More than ten years	0.6
	Unable to recover	7.2

Table 3. Business concerns due to COVID-19 pandemic (N=181).

	Mean	SD	Cronbach α
Cash flow	4.77	.668	.850	.867
Secure additional funding	4.16	1.252	.864
Limited capital	4.43	.984	.851
Lower consumer spending	4.51	.917	.847
Overall long term impact on the economy	4.70	.683	.853
Economic uncertainty	4.59	.767	.856
Booking cancellations	4.57	.864	.855
Travel restrictions	4.75	.724	.857
Guest confidence	4.08	1.162	.867
Uncertainty around COVID-19	4.71	.697	.850

SD = Standard Deviation.

Table 4. Correlation analysis: Business concerns during the COVID-19 pandemic (N=181).

		Y	X1	X2	X3	X4	X5	X6	X7	X8	X9	X10
Y	Correlation Coefficient	1.00
	Sig. (2-tailed)
	N	181
X1	Correlation Coefficient	1.000	1.000
	Sig. (2-tailed)	.	.
	N	181	181
X2	Correlation Coefficient	.383**	.383**	1.000
	Sig. (2-tailed)	.000	.000	.
	N	181	181	181
X3	Correlation Coefficient	.532**	.532**	.682**	1.000
	Sig. (2-tailed)	.000	.000	.000	.
	N	181	181	181	181
X4	Correlation Coefficient	.415**	.415**	.470**	.460**	1.000
	Sig. (2-tailed)	.000	.000	.000	.000	.
	N	181	181	181	181	181
X5	Correlation Coefficient	.379**	.379**	.338**	.405**	.548**	1.000
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.
	N	181	181	181	181	181	181
X6	Correlation Coefficient	.349**	.349**	.420**	.379**	.532**	.427**	1.000
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.
	N	181	181	181	181	181	181	181
X7	Correlation Coefficient	.369**	.369**	.350**	.327**	.418**	.278**	.391**	1.000
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.
	N	181	181	181	181	181	181	181	181
X8	Correlation Coefficient	.502**	.502**	.303**	.442**	.353**	.353**	.370**	.392**	1.000
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.
	N	181	181	181	181	181	181	181	181	181
X9	Correlation Coefficient	.334**	.334**	.323**	.321**	.368**	.277**	.357**	.410**	.343**	1.000
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.
	N	181	181	181	181	181	181	181	181	181	181
X10	Correlation Coefficient	.428**	.428**	.355**	.332**	.404**	.390**	.405**	.444**	.399**	.465**	1.000
	Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.
	N	181	181	181	181	181	181	181	181	181	181	181

**Correlation is significant at the 0.01 level (2-tailed).

X1 Cash flow, X2 Securing additional funding, X3 Limited capital, X4 Lower consumer spending, X5 Long term impact on the economy, X6 Economic uncertainty, X7 Booking cancellations, X8 Travel restrictions, X9 Guest confidence, X10 COVID uncertainty.

Table 5. Chi-square analysis (N=181).

Guesthouse characteristics and concerns	Economic impact
Star grading	.424
Number of guestrooms	.000*
Duration of operation	.366
Negatively affected by COVID-19	.007*
Start of disruptions	.261
Start of cancellations/postponements	.876
Revenue decline	.006*
Ability to cover fixed costs	.000*
Risk of bankruptcy	.036*
Concern: Cash flow	.000*
Concern: securing additional funding	.000*
Concern: Limited capital	.000*
Concern: Lower consumer spending	.000*
Concern: Overall impact on the economy	.000*
Concern: Economic uncertainty	.023*
Concern: Booking postponement/cancellation	.155
Concern: travel restrictions	.000*
Concern: guest confidence	.072

*Significant values (p<0.05).

Table 6. Importance of economic response measures to the COVID-19 pandemic (N=181).

Economic measures	Median	Mean	SD	Cronbach α
Income tax relief	1.00	1.61	1.072	.860	.876.
Regulatory relief	1.00	1.50	.970	.860
Line of credit	2.00	1.97	1.093	.859
Defer/exempt tax payments	1.00	1.75	1.149	.846
Rebate on utility bills for a certain period	1.00	1.38	.858	.859
More flexibility from banks on existing loans	1.00	1.89	1.220	.857
Modify booking and cancellation policies	2.00	2.04	1.102	.870
Review and modify insurance policies	1.00	1.63	.978	.866
Eliminate/diversify certain products and services	2.00	2.38	1.253	.885

Table 7. Current status on economic measures (N=181).

	Have done	I have not done, but plan to do	Do not plan to do
Reduced salaries/wages	60.8	16.6	22.7
Retrenchment of staff	29.8	40.9	29.3
Terminate the employment of short-term staff	42.0	17.7	40.3
Reduce employment benefits	18.2	22.1	59.7
Use business reserves/savings during the pandemic	82.9	6.6	10.5
Apply for a new loan or existing current loan	27.1	23.8	49.2
Obtain relief funding from government sources	58.6	25.4	16.0
Cancel contracts with suppliers	48.1	17.1	34.8
Suspend business activities not to incur costs	54.7	18.8	26.5
Closure of certain facilities and services	54.7	11.6	33.7
Sell/close down the guesthouse	7.2	32.0	60.8