Load shedding is impacting SMEs in the hospitality industry

Federated Hospitality Association of South Africa (FEDHASA)
Federated Hospitality Association of South Africa (FEDHASA)

While the threat of continued load shedding looms large on the national agenda invoking fears of mass power outages the Federated Hospitality Association of South Africa in Cape Town (FEDHASA Cape) is adding their voice to the call for government to provide adequate energy security intervention. At the ‘Business meets Government meeting – focusing on energy security’ hosted by the Western Cape Government on 3 March 2015 in Cape Town, FEDHASA Cape chairman, Rob Kucera  raised member concerns on the impact of continued load shedding on the hospitality industry.

Of particular alarm is the impact unscheduled and unrestricted load shedding has on Small to Medium Enterprises (SME) members in the small accommodation and restaurant sectors. Largely entrepreneurial in nature these businesses lack the reserves to absorb the losses incurred through load shedding and have had to resort to extreme measures to remain viable and competitive.

While using generators is an option for some the cost implication for these businesses are unsustainable over the long term. Member feedback from a recent FEDHASA Cape survey with small accommodation and restaurant members indicated that the prospect of spiralling energy costs related to load shedding have had many business owners questioning their continued survival.

“Our concern is that small businesses in the hospitality sector already face the uncertainty of seasonal revenue fluctuations and will now need to contend with the added insecurity of load shedding,” said Mr Kucera.

Members have indicated that they are using gas appliances in their kitchens, limiting menu options to low energy intensive dishes and have installed LED lighting to minimise over-all energy costs.

“We believe that the short term measures applied by our members in particular paints an accurate picture of the stresses faced by the larger SME community in South Africa. While government has reiterated its call to support and grow this sector, we cannot over emphasise the threat continued load shedding has and will have on the survival of these businesses,” concluded Mr Kucera.