Friday, July 30, 2021

The turn ‘off’ events: How Covid 19 keeps some hospitality companies in Botswana out of business

The Covid 19 pandemic has highlighted the need of the hour – a rethink of ‘events’ by companies which are trading in this sector.

The message is quite clear for sector players; until a vaccine is available, restrictions that limit the size of gatherings are expected to remain in place to allow for effective social distancing. The restrictions were first imposed in April 2020 when cases of Covid 19 began to rise in Botswana. At the time the Botswana government imposed some restrictions through the State of Emergency Regulations of 2020.

In late 2020 as the hospitality industry together with the rest of the economy began reopening, additional stringent health and safety protocols have been introduced to ensure peace of mind for both staff and guests. But there are those that remain closed.

These venues can only open if the government can successfully carry out mass vaccination according to captain of the industry. Infact key players in the industry are praying that the Botswana government reach its goal of herd immunity, so as to allow the safe opening of the entertainment industry.

Mass vaccination involves delivering immunizations to a large number of people at one or more locations in a short interval of time while herd immunity` is resistance to the spread of an infectious disease such as Covid 19 within a population that is based on pre-existing immunity of a high proportion of individuals as a result of previous infection or vaccination.

IntergageLive Botswana Managing Director Ajani Sandridge says anything other than a mass immunization strategy for the population would not really help in returning the entertainment industry to operating at maximum capacity.

IntergageLive Botswana is a local venue and facilities management company, which took over operational management of Molapo piazza in March 2020. The Covid pandemic hit the company immediately as it began its work.

“Until we have a mass vaccination plan to get our small population of about 2 million people vaccinated, we are going to talk about safe opening without a clear-cut solution”, says Sandridge.

Still in the capital Gaborone, BotswanaCraft has been one of the ‘go-to’ for many art and music lovers. The centre did not only host music and arts festivals but it is also home to a craft shop, restaurant as well as conference and events facility.

BotswanaCraft’s Sales and Marketing Officer – Kevin Groth shares the Sandridge’s sentiments on what could speed up the reopening of the sector.

Just like the rest of the companies, Groth says the Covid 19 pandemic has badly affected the company’s turnover and the profitability of the business with only a few, very small conferences taking place.

With regards to the remedial solutions to the safe opening of the entertainment industry he says “we urge vaccination of the public.”

The Covid pandemic has affected stakeholders in the entertainment industry, with venue and facility management companies being most hard hit. They are left with venues and facilities that are at risk of becoming white elephants, if they continue to be unused.

Sandridge also shares that, like BotswanaCraft the pandemic affected their operational revenue and has resulted in loss as a result of less or no bookings at all. Furthermore the Molapo mall base company also experienced a decline in foot traffic to the facility, as the mall they are located lost a key retail tenant which meant people visited the mall less. Due to the State of Emergence and other implications it has made it harder for people to want to hire the facility for events.

“When you say we should put only 50 people in that space, its only a drop in the bucket. We have not been able to come to normal capacity based on our size and based on limitation. However if it is 50 percent capacity then this venue is the best place to be, it is completely, open space, constant airflow and a roof to cover from the sun. during this period of time I would want my event outside,” says Sandridge.

To supplement company income, IntergageLive Botswana has been hosting smaller functions.

“What we are doing is package our offering for workshops, meetings and product launches that are allowed to 50 people capacity. We had to change our whole pricing structure to fit what is happening now. What is able to happen now is corporate events, product launches and we have not put a time limit. You can use the venue for how as long as you need”, says Sandridge.

On the issue of recent tax increase, Sandridge shares that the company has not changed its prices. However it does make the cost to the customer a little higher, two percent high.

“Because of the Covid and our adjustment to the product size we have reduced the cost to hire the place, so that the burden of the two percent is not that great”.

While BotswanaCraft facility on the other hand can host up to 1200 people for live music shows the company has not been able to host a single live music performance open to the public since the outbreak of Covid19.

“We have hosted small conferences with 10-20 people in attendance but there have not been many. Previously our indoor conference capacity was 100 people seated. We have started to provide online conferencing as an option. We have also restructured the business and reduced salaries”, says Groth.

On what they are doing to supplement company income, Groth says “We had previously diversified into various income streams (craft shop, restaurant, events) however all have been significantly affected. Currently we are deciding on a way forward for the future including additional means to earn income.”

BotswanaCraft just like its competitor across the A1 Highway has not changed its prices following the VAT increase.

“The recent tax increase reduced the profitability of various products and services whose prices we decided to keep the same despite the increase in VAT”, says Groth.

As it stands, the future of the sector is hanging in the balance as clients are changing their business practices, opting for alternatives that reduce contact meetings. In addition, companies’ balance sheets are being reconfigured to cover costs related the Covid 19 disruptions, which means they have redirected funding from events related activities.

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