No matter which way you slice it, loadshedding is doing an incredible amount of damage to our economy. According to Investec, loadshedding cost South Africa R300 billion in 2022 and resulted on the loss of five percent of its GDP. For a hospitality industry already reeling from the impact of the pandemic, the threat of a winter where businesses must regularly face 10+ hours without electricity could derail the gains the sector has made. Fortunately, for guests looking for a warm, electrified, and safe experience, groups like The Capital Hotels, Apartments & Resorts are taking matters into their own hands rather than waiting for someone to save them.
It is Time To Become Loadshedding Proof
As a result of frequent power cuts, the hospitality sector has had to adapt to a whole host of new issues that result in ballooning operational costs. With loadshedding expected to continue for at least the next two years, with some predicting it could be longer, any business worth its salt must be considering alternatives.
Marc Wachsberger, CEO of The Capital Hotels, Apartments & Resorts says, “We do not believe that loadshedding should have any impact on our guests. We have created an oasis of normality in what is becoming an increasingly turbulent country and have some ground-breaking steps to ensure that nothing disturbs a visitor’s time with us.”
This means a significant amount of investment has been put into backup power and water supplies with several properties in the group being able to run for days without those essential services. A prime example of this is the solar panel pilot project at The Capital Empire. Last October, The Capital, in partnership with Rhino energy, invested almost R2 million in creating solar power infrastructure that reduces their dependence on Eskom. With little maintenance required and a lifespan of 20 years, the move shows how sustainable thinking can produce solutions that outlast our current woes. The project has been such a success that, from 2024, The Capital will spend R10 million rolling the programme out across three more of their properties. That means that within the next two to three years 80% of the group’s properties will be solar powered.
In a move aimed at continually improving their sustainability efforts, The Capital will also be reducing the amount of time that their diesel generators run during the day. It is well known that burning fossil fuels negatively impacts the environment. Ramping up their investment in renewable energy while simultaneously cutting back on their use of diesel generators is a move that other players in the industry should aim to emulate.
The effects of loadshedding on the hospitality industry cannot be overstated. Power outages mean that guests are left in the dark, elevators stop working, and kitchen equipment grinds to a halt. Imagine the heat when aircons stop working at The Capital Zimbali, located in the warm and humid province of Kwa-Zulu Natal, it’s not what a 5-star resort promises to its guests who expect to be cool and comfortable. All of these can have a devastating impact on the guest experience, leading to lost revenue and reputational damage.
Creating Safe Havens
One of the many unforeseen consequences of never-ending loadshedding is protest action. According to their latest data, the South African Reserve Bank’s Quarterly Bulletin for 2022 found that South Africa had lost 1.6 million work days in the first six months of 2022 and March’s national shutdown has businesses and government in a state of panic at the potential repercussions.
The coming cold spells, increased loadshedding and the economic effects of it will undoubtedly lead to even more protest action. The hotel groups that not only provide basic services like electricity and water but also go above and beyond to ensure guest safety in the face of any eventuality will be the ones with the edge.
The impacts of loadshedding will be felt by the hospitality sector for years to come. However, that does not mean it is all doom and gloom. According to the World Travel Tourism Council, the Rainbow Nation’s tourism industry has a bright decade ahead of it. If all goes well, the industry is projected to create 800 000 jobs, grow at 7.6% per year and contribute more than half a trillion rand to the country’s economy by 2032. For innovative hotel groups with the power to pivot, that means the next decade could be brighter than our current loadshedding woes would have us believe.
