CONTRACTS

THE FINE PRINT

The detection of the Omicron variant in South Africa resulted in an almost overnight shutdown of South Africa’s outbound industry and a potential fresh wave of cancellations. Meetings hears from the business events and tourism industry on how companies are managing these ups and downs.

From postponements to outright cancellations, the difficulties of working during the Covid-19 pandemic have meant that the terms and conditions of already-signed contracts and agreements are being scrutinised more closely now than ever before. New contracts are being drawn up with painstaking attention to detail because nobody can afford a costly oversight or loophole that leaves one or all parties high and dry.

On 14 December 2021 – shortly after the announcement of the Omicron variant’s discovery – SITE Africa, together with the SA Events Council, hosted a two-hour webinar to unpack just some of the issues experienced by the business events and tourism industry as it negotiates and navigates the terms and conditions of its contracts. The webinar was comprised of a panel of industry stalwarts and experts who discussed how we can find a way through some of the more difficult aspects of contracts and the Ts & Cs that apply.

EXTENSIVE AND FAR-REACHING IMPACT

Tes Proos, founder of Crystal Events and president of SITE Africa, led the discussion during the webinar. She was joined by several association heads, including Glenton de Kock, CEO of the Southern African Association for the Conference Industry (SAACI); Jillian Blackbeard, who heads up Africa’s Eden; and Otto de Vries, CEO of the Association of Southern African Travel Agents (ASATA), among others.

“This is probably the worst-case scenario of what we could have hoped for. The outbound industry was looking forward to one of its best Decembers in many a year, even prior to 2019. Unfortunately, the industry found itself in a position where, in 48 hours, this had pretty much collapsed, with all of our primary destinations shutting down,” said Otto. He also noted that a number of European ambassadors he met with commented that they had never seen such a well-coordinated shutdown after the announcement of the Omicron variant. Borders were immediately shut after the news came to light, with numerous airlines already scaling back capacities.

“Unless this ban is lifted very quickly, we are going to find ourselves in a dire situation,” emphasised Otto.

Unfortunately, the lifting of the EU’s travel bans on Southern African nations came too little too late to benefit from the busy December period, with bans falling away only in the second week of January. Similarly, Mauritius lifted its travel ban against these countries in early January. The financial impact of the bans was immediately felt; Africa’s Eden surveyed 60 of its member companies and calculated that in the first week of the various bans being implemented, they had already lost a collective US$135 000 (R2.1 million) as a result of cancelled bookings.

CLICK HERE If you would like to watch the full webinar on demand, click here.

STANDARDISED STANDARDS

A concern raised by Glenton was the uniformity of norms and standards for the safe operation of industries such as travel, tourism and the more niche MICE industry – recognised as a subsector of tourism.

“The implementation of norms and standards across the board is varied throughout our country. While we are being impacted globally, in a South African context, depending on where your event or business conference is held, you are also affected by the JOC (Joint Operating Committee) application process,” Glenton explained.

The JOC was established by the City of Joburg but applies only to the City’s jurisdiction.

While uniformity across the board is important, the industry, according to Glenton, is running the risk of overregulating itself by doing far more than it needs to.

“We have a set of guidelines that I feel the government should take more seriously. We are excited by the new norms and standards drafted by the National Department [of Tourism] because it’s an early signal that we are going to have to self-regulate our industry,” Glenton added.

SCENARIO PLANNING

To understand how to best militate against any further losses, panellists during the session looked at a range of scenarios that can and should be considered when drawing up contracts.

“After Omicron, there will be another variant. As soon as we figure how to live with it, things can only improve,” remarked Huw Tucket, executive director at Euromic.

In the wake of the numerous cancellations that have scuppered many a business opportunity, Huw foresees 2022 being an ideal seller’s market to recoup losses as far as possible.

Policies around postponements of accommodation were also a focus during the webinar. Andrew Camp, group manager: International Sales and Marketing at Sun International, commented that if bookings need to be postponed, flexibility is key.

“From 2020 to 2021, we moved bookings at the same rate. We look at every case differently and separately but with flexibility in mind,” he said.WHO IS CURRENTLY BANNED FROM TRAVEL WHERE?

It has been wonderful to see that there is a lot more flexibility between clients and suppliers, especially from the end client being more flexible with regard to cancellation and management fees.”

– Tes Proos, president, SITE Africa

SkyScanner has updated its travel restrictions map to show what level of restrictions are faced by those who are fully vaccinated compared to those who are not. As at 12 January 2022, travellers from South Africa were subject to the following:

Restriction level Unvaccinated

Low Moderate High Unknown 39 24 93 4

Fully vaccinated

74 25 57 0

WHAT THE RESTRICTIONS MEAN

Low restrictions – You can visit these countries. You’ll likely need proof of a negative Covid-19 test or vaccination to travel. Moderate restrictions – Visiting these countries is possible, but you may have to quarantine on arrival or return. You might also need to show proof of vaccination or a negative test. Major restrictions – Travel to these countries is not advised. Their borders may be completely closed to non-residents or non-nationals. Unknown – Unfortunately, SkyScanner does not have information for this destination. Please check with government sources for the most up-to-date travel advice. IN CONCLUSION

Flexibility and good relationships will be key in negotiating terms and conditions. Further, training will be imperative to ensure that we can develop and maintain a world-class standard that delivers on client and guest expectations. Lastly, an understanding from clients and investors of the potential ROI and true value proposition of corporate events and travel experiences will help secure and preserve any future opportunities.