South African hotel operator Tsogo Sun will temporarily close up to 36 of their hotels across the country following a collapse in demand as the COVID-19 pandemic worsens.

Travel bans imposed by many countries throughout the world to help curb the spread of coronavirus has led to the sharp decline in demand for hotel stays.

In a statement, the hotel explained they are thus currently searching for ways to reduce costs and capital expenditure, and have decided to temporarily close hotels in key areas where they have multiple properties. They will then consolidate demand into the available operating hotels in those areas.

“Given the environment of the past few weeks we had already implemented actions in order to reduce costs and capital expenditure, and these have now been expanded to eliminate virtually all variable costs, substantially reduce the fixed cost overheads, conserve cash in order to preserve the sustainability of our business and the people whose livelihoods depend on us,” Tsogo Sun wrote in a statement.

The 36 hotels represent 7 700 rooms, approximately 40% of the group’s portfolio. Exact details of which hotels will close have not yet be released.

Tsogo has already postponed the majority of events or conferences scheduled to take place at hotels across their portfolio for the next three months. They plan to continue essential maintenance only.

“In addition, head office support functions will operate on a limited staff-only basis to ensure good communication with guests, partners and suppliers in order to facilitate this process and most importantly, ensure the smooth reactivation of these hotels once the situation normalises,” reads the statement by Tsogo Sun.

Picture: Facebook / Tsogo Sun

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