Tourism is critical to the economy and one of SA’s largest employers.
According to Stats SA, in 2019 the sector directly contributed R209bn to the economy, almost 3,7% of GDP, and employed about 775,000 people in the formal sector.
It was also among industries hardest hit by the Covid-19 pandemic, when international travel was suspended during lockdowns, resulting in huge job losses.
As the industry implements post-pandemic recovery strategies, tourism leaders say it has to focus on its transformation goals.
The Sanlam Gauge Report compared the scorecards of 176 companies and found an industry that strives to reach its targets, despite myriad challenges.
While it has not achieved all its scorecard requirements, apart from socioeconomic development, it is a sector that is doing well across the board, despite being a level 4 BBEEE contributor.
Tourism achieves 78.3% of its ownership target, the third-highest of all sectors. It also does well on its management and control scorecard. The sector achieves 66% of its target for this element.
However, when it comes to investing in upskilling its workforce, tourism appears to be in full recovery mode, achieving 80.8% for skills development.
At 65.2% of the target, the sector’s enterprise supplier development element also looks impressive when compared with other sectors.
While numbers are looking good, industry insiders fear these do not necessarily translate to lived transformation on the ground and that more needs to be done for meaningful transformation.
Business Tourism Council SA CEO Tshifhiwa Tshivhengwa has implored tourism industry players to carefully make a distinction between achieving scorecard targets and delivering meaningful transformation that is enjoyed by everyone on the ground and is sustainable.
He says tourism is a relationships-based business, leading people to do business or with those they know. He has called on industry leaders and entrepreneurs to be deliberate in empowering disadvantaged people, particularly youth, training them to gain a broader understanding of the tourism value chain.
“In terms of transformation, the existing owner can sell the business, but they’re not selling their valuable industry relationships,” he says. “They can sell one business and then start another, taking their existing clients with them because they still ‘own’ these relationships. The new owner of the original business starts off on the back foot.”
Rob Hetem, vice-chair of the Southern African Tourism Services Association’s board, says access to funding for black players who want to buy equity in existing businesses continues to be a barrier to entry into an industry whose asset value is based on reputation and goodwill.
He says there is a large number of grassroots producers and business owners who are not part of the formal economy and fall off the radar because they are often not suitably registered.
“One of the best ways to bring more (black) people into tourism is to create more businesses and, for that to happen, we need more tourists to visit South Africa.”
Speaking at a tourism industry workshop organised by Sanlam Gauge with sectorial leaders, Tourism Transformation Council of SA chair Lindiwe Sangweni-Siddo urged industry captains to pay special attention to empowering black women at board, executive and senior management levels for transformation to translate into real participation of women at these levels and feed into the management control element.
Hamza Farooqui, CEO of Millat Properties, a tourism and hospitality entrepreneur, says BEE has merely groomed an elite set of people in the past 20 years and failed to create a culture for the average South African to strive towards excellence, irrespective of race.
He says he has not benefited from BEE and instead of aiding him, it has been a stumbling block to his success because banks do not lend capital based on race, but rather support of a bankable idea.
“Black entrepreneurs need to be taught meritocracy excellence and entrepreneurship, not a handout, not a scorecard and not a grudge. That is what is going to bring a wave of change, bring real job creation and sustainable growth.
“The scorecard system has not worked. [It is] a tick-box exercise which entrenches the status quo. Something different has to be done. A budding entrepreneur needs to have the best idea, the best focus and understanding of the market, and needs to be allowed to compete (irrespective of race).
“Competition is what is going to create a successful economy and capital provision needs to be unconditional. The only way to deal with it is when banks say, ‘I don’t care whether you are black, blue or green, I’m going to fund you because you have the best idea and you are the best jockey’,” says Farooqui.
• This article was paid for by Sanlam.
