Tourism has had a tough couple of years. Just as it promised to boost job opportunities and improve the economy, the pandemic hit and scrambled any possible plans. Looking at a post-COVID-19 world, the industry has shown resilience, only now returning to pre-pandemic levels.
“The industry is caught between recovery and resilience,” says Anton Gillis, CEO of Hospitality Asset Management Company (HAMAC). “While demand has returned post-COVID, systemic pressures are undermining progress. Human capital is the biggest constraint, with 77% of hoteliers struggling to recruit and retain staff, and nearly 70% dissatisfied with graduate skills. At the same time, profitability is being squeezed by rising labour, food and utility costs, alongside infrastructure failures and regulatory complexity that limit operational flexibility.”
The data that Gillis refers to has been released in the recent inaugural Hospitality Asset Management Company (HAMAC) South African Hoteliers Report.
“The findings confirm what many hoteliers experience daily: recovery on paper is not the same as recovery in practice,” he adds. “The challenges facing the sector are largely systemic rather than strategic. Without meaningful intervention, these pressures will continue to erode resilience and limit growth.”
Trust in Key Stakeholders is Vital
“The report highlights a significant trust deficit, with 70% of hoteliers lacking confidence in national tourism bodies,” Gillis notes. The fact of the matter is that tourism operators across the tourism value chain recognise they cannot rebuild the industry on their own. It needs support from strategic partners such as tourism councils. Yet, they are left to their own devices.
According to the reports’ findings, the limited confidence is aimed at bodies such as SA Tourism and the Tourism Grading Council of South Africa (TGCSA), while sentiment towards the Federated Hospitality Association of South Africa (FEDHASA) was evenly split, highlighting concerns around advocacy effectiveness and sector representation.
However, there is advice for operators on what to take matters into their own hands.
“In response, operators can take ownership locally by forming alliances to share marketing costs, develop bundled regional experiences, and collaborate on supply chains. Partnering with local farmers and artisans reduces costs, strengthens local economies, and creates the authentic, regenerative tourism stories travellers increasingly value.”
For example, a lodge can partner with local tour operator services to transport tourists to various tourist attractions. Accommodation operators can go even further, partnering with specific restaurants or even adventure tourism operators to provide a discount or “partner deal” to individuals who can show that they have booked accommodation with a specific business.
Doom and Gloom, But Also Hope
Although the report appears to be all doom and gloom, Gillis believes that there is hope. “While the challenges are real, the outlook is not without optimism. Nearly half of hoteliers (46%) say that if infrastructure pressures like electricity and water were resolved, their top priority would be investing in their workforce.
“In parallel, 77% are actively exploring new technologies to automate manual processes and improve efficiency, freeing staff to focus on the human experience that defines South African hospitality. Demand has recovered; the task now is fixing delivery and profitability, which is achievable through coordinated action.”
Reaching the International Market
Gills has advice for small tourism operators who are aiming to attract international tourists. “Small operators are the industry’s authenticity engine,” he states. “As travellers move away from checklist tourism toward immersion, independent operators are best placed to offer specialised, locally rooted experiences that larger groups cannot easily replicate.”
He continues to share that they can also adopt new technologies faster, using digital and AI tools for personalised guest engagement, and to clearly demonstrate how tourists’ spending benefits local communities. “This is what international travellers increasingly demand.”
Trends to Watch in 2026
He notes that several trends are emerging alongside recovery. “The human capital crisis is deepening, with recruitment challenges and skills gaps persisting. Beyond headcount shortages, the Report highlights a skills and capability gap across the sector. Close to 70% of respondents reported dissatisfaction with the competency levels of newly recruited graduates, raising concerns about the long-term readiness of the hospitality workforce.”
In addition to this, there is a rising labour and utility costs that continue to compress margins, prompting increased interest in automation, AI and smarter resource management. This trend of investing in automation will continue throughout 2026 and may include introducing technologies such as booking software.
“At the same time,” Gillis explains, “operators are prioritising workforce development and essential refurbishments to protect long-term resilience, even as funding constraints delay broader investment.”
The report highlights that operational margins remain constrained, with labour costs cited as a major pressure point by 37% of respondents, followed by utilities – particularly electricity – at 34%, and food costs at 29%.
Capital investment is also being deferred. More than half of respondents (54%) have delayed essential upgrades or improvements due to funding constraints, freezing growth and limiting competitiveness.
It’s worth noting that competition isn’t always measured amongst local businesses, but rather the global tourism industry as a whole.
Walking into the Future
Gills champions the importance of tourism as an economic driver in the South African economy. “Hospitality must be treated as strategic economic infrastructure,” Gillis adds. “The sector creates jobs, drives regional development and supports local economies, but to remain competitive it needs the right support structures in place.”
“The Report concludes that while South Africa remains a world-class tourist destination, the hospitality sector’s ability to deliver on its potential will depend on coordinated action across skills development, infrastructure reform, targeted investment and collaborative planning.”
Without the much-needed support from governing bodies and tourism councils, local tourism operators can only do so much. But there is hope. As the industry walks the delicate line between recovery and resilience, businesses in this sector can respond to the demands of the international market. This is done by creating curated experiences with industry partners that speak to tourists’ preferences, such as immersion in cultural experiences and local activities.
Tourism has had a tough couple of years. Just as it promised to boost job opportunities and improve the economy, the pandemic hit and scrambled… Read More
