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R20m for distressed KZN tourism businesses

Home Business Management Disaster Management R20m for distressed KZN tourism businesses

AT least 400 KwaZulu-Natal tourism businesses are set to benefit from the R20-million Tourism Relief Fund which has been set up by the provincial government to support businesses in distress as a result of COVID-19.

This was announced today by MEC for Economic Development, Tourism and Environmental Affairs Ravi Pillay, while giving details of the relief scheme recently.

Applications for the Fund opened on 15 of March and will close on 15 April 2021. Successful tourism businesses will each receive R50,000 while tourist guides stand to receive R4,500 each. Priority will be given to enterprises that were not able to benefit from any of the available government funding schemes for COVID-19.

“The survival of small, distressed tourism businesses during this trying time is of critical importance. This is why as the KZN government we have recognized the need to intervene to save these businesses from total collapse. We also hope that this scheme will to jobs being saved,” Pillay said.

The MEC added that he believed government’s intervention would help small struggling businesses minimise the negative effects of COVID-19 and help them maintain a basic level of operational sustainability during the pandemic.

“The emergence and spread of coronavirus, early last year, had a severe and adverse economic impact on the tourism industry in general and to small tourism enterprises in particular.

“These businesses were heavily dependent on providing services to both international and domestic travellers to sustain their businesses. When travel bans were imposed by various countries, including South Africa, bookings were cancelled and businesses had to shut down their operations for a period of time,” said Pillay.

This, he added, has resulted in a loss of revenue, the result being that businesses and tour guides are unable to sustain themselves and their employees.

Some business owners were reliant on equity funding and loans from banks and other financial institutions for their start-up and continuous operations. Their contractual obligations mean that they have to repay funds and loans every month, irrespective of whether they have any revenue coming in or not.

Last year the R100-million National Tourism Relief Fund successfully supported 4,000 businesses, 607 of which are from KZN.

The following businesses are eligible for the latest relief offering:

  • Accommodation Establishments.
  • Hospitality and related services (restaurants which are not attached to hotels; conference venues which are not attached to hotels, professional catering and tourist attractions).
  • Travel and Related Services (tour operators, travel agents, tourist guides and coach operators).
  • Businesses which have been operating for a minimum of one year are eligible for relief funding, providing they meet other requirements.

Grants will be prioritised to achieve transformation and equity targets which means that at least 70% of beneficiaries will be enterprises that are black-owned; at least 50% of beneficiaries will be enterprises that are women-owned; at least 30% of beneficiaries will be enterprises that are youth-owned and at least 4% of beneficiaries will be enterprises that have met a target of at least 2% employment of people with disabilities.

Criteria for businesses

  • Businesses must be registered or show evidence that they are in the process of registration with EDTEA.
  • Proof of registration with Companies and Intellectual Property Commission (CIPC);
  • Confirmation of an annual turnover not exceeding R2.5-million.
  • Copy of valid tax clearance certificate issued by the South African Receiver of Revenue.
  • Proof of compliance with the national minimum wage rate.
  • Proof of UIF registration for employees employed in the business.
  • Proof that an enterprise is the existing tourism-specific establishment as outlined in the scope of the application (suppliers and intermediaries are not eligible).
  • Proof that the enterprise has been in existence for at least one business financial year.
  • Applicants also have to provide statements of the financial position: over 6 months’ bank statements, balance sheet, income statements, cash flow statements.
  • Motivation for the intended use of funding.

Criteria for tour guides

  • Be registered as a tourist guide with EDTEA.
  • Be a tax payer in good standing with valid tax clearance certificate/PIN before the grant is disbursed.
  • Be in business for one year or more.
  • Motivate how lockdown regulations brought about hardship and distress in the business.

The application forms for tourist guides and tourism enterprises should be supported by the following documents:

  • Certified ID copies of directors/members;
  • A business profile; and
  • certificate of B-BBEE or affidavit and medical certificate for people with a disability where applicable.

Applications will be evaluated by an independent assessor for verification and these assessments will go before a screening committee.

Applications open on 15 March and close on 15 April 2021. Forms are downloadable from the official TKZN website: www.zulu.org.za.  Only electronic application forms will be accepted. The completed application forms together with supporting documents must be scanned or converted into pdf and sent to the following email address: kzntourismrelief@zulu.org.za

For enquiries, contact the help desk: kzntourismrelief@zulu.org.za or call 0861 777 579.

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