The businesses hardest hit by liquidations in South Africa right now
Over 1,400 South African businesses have been liquidated in 2022 so far, with 170 more recorded in September, data from Statistics South Africa shows.
The total number of liquidations increased by 11.8% in September 2022 compared with September 2021, and the total number of liquidations increased by 2.1% in the third quarter of 2022 compared with the third quarter of 2021.
There were 13 additional liquidations compared to 157 recorded in August.
A decrease of 3.7% was recorded in the first nine months of 2022 (1,425 liquidations) compared with the first nine months of 2021 (1,479).
The financing, insurance, real estate, and business services sector is the hardest hit by liquidations, recording 58 closures in September and 472 in the year to date. This is followed by the trade, catering and accommodation sectors, with 33 and 281 liquidations for the month and year to date.
These were the only two sectors that had double-digit liquidations, with the community, social and personal services sector recording eight, the manufacturing sector recording seven and the construction sector recording six.
About 423 businesses are unclassified, making up 30% of the total.
The liquidation data shows that businesses in the catering and accommodation sector remain under pressure, with 13 more businesses in that category being liquidated.
Data published on Monday (24 October) from the tourism sector shows a shifting trend, however, with revenue generated from the sector on a path to recovery following two years of stunted operations.
Measured in nominal terms (current prices), total income for the tourist accommodation industry increased by 55.4% in August 2022 compared with August 2021.
Income from accommodation increased by 80.3% year-on-year in August 2022, the result of a 54% increase in the number of stay unit nights sold and a 17.1% increase in the average income per stay unit night sold.
The largest contributors to the increase in income from accommodation were hotels (118% and contributing 46.4 percentage points) and ‘other’ accommodation (59.1% and contributing 29.9 percentage points).
Income from accommodation increased by 89.5% in the three months ended August 2022 compared with the three months ended August 2021. The main contributors to this increase were hotels (157.7% and contributing 56.5 percentage points) and ‘other’ accommodation (53.2% and contributing 28.6 percentage points).
Total income from accommodation amounted to R5.2 billion, Stats SA said. Income from accommodation excludes restaurant and bar sales and ‘other’ income.
Despite the uptick in revenues, Stats SA noted that the tourism sector is still far from its pre-Covid levels.
Income levels
The same issue is seen in vacancy levels, which are falling short of pre-Covid levels and trending flat as the year approaches peak season.
Occupancy rates for hotels are still low at 35.4%, while guest houses are lower at 21.5%.
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