Half of all travel agencies in South Africa don’t have the cashflow to survive beyond July if the current travel ban continues, according to an Asata survey.
Ceo Otto de Vries says 50% of 132 travel agencies surveyed at the beginning of May said they would have to close within three months if the travel lockdown persisted, and 35% indicated they would have to do so within six months. He says the sample is representative of what is happening in the industry at large.
The survey tallies with opinions among industry leaders (who asked not to be named) that up to 60% of agencies are at risk. Otto believes ITCs, franchisees and businesses that drive high volumes and low margins are particularly under pressure.
“It really depends on how well businesses have managed the crisis at an early stage by conserving cash, mitigating risks around customer demands for refunds, managing receipts from suppliers and customers, rightsizing their staff and minimising all other costs to sustain the business as long as possible. Those that are able to conserve cash and mitigate costs are the ones who are going to be best positioned to survive through this,” says Otto.
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