How to fully realise SA's potential as a tourism destination

SA has a tourist product of unequalled diversity that few other countries can match. The country’s tourism sector is a key driver of the economy and contributed 3.7% to GDP in 2019. 

Most tourism businesses are micro, small and medium sized enterprises (SMMEs), which contribute to local economies and provide more than a million jobs, in particular providing lower skilled entry-level positions critical for the country’s future.

Yet SMMEs in the tourism sector face significant challenges including failing public utilities, social unrest, crime, exchange rate volatility and political disruption. Pandemic restrictions also meant that many tourism businesses were hard hit financially. 

A recent Business Day Dialogue — watch the recording below — put the spotlight on SA’s potential as a tourism destination.  Hosted in partnership with the International Labour Organisation (ILO), it featured a panel discussion during which experts addressed the most pressing challenges facing SMMEs in the tourism sector and how they can be resolved. 

Dragan Radic, head of the ILO's SME unit, pointed out that problems such as load-shedding, crime and failing infrastructure affect SMMEs even more than they do large companies. They need to be resilient and plan for contingencies to cope. They also need to be able to diversify in a volatile industry. To achieve this requires market information, which is often not made available to them. They need creative financial solutions, to digitalise, and for government to reduce regulatory compliance.

The pandemic, said Themba Khumalo, acting CEO and chief marketing officer at SA Tourism, proved the importance of domestic tourism. International travellers are being invited by SA Tourism’s bridging campaign to come “Live Again”, but follow-on campaigns need to be targeted specifically to markets such as adventure travel. 

However, SA needs to achieve parity when it comes to the basics (such as transport and banking) and be exceptional when it comes to food and accommodation.

For Khumalo, it’s all about partnerships: SA Tourism working with the Southern Africa Tourism Services Association (SATSA), who work with government departments to produce effective marketing to achieve an increase in tourism — and job creation.

David Frost, CEO of SATSA, added that New Zealand started promoting adventure tourism to younger, more intrepid travellers with just five products. SA can do even better with more than 100 activities, and should plan to strengthen and grow this market, bringing SMMEs in.

Digital nomads form part of this focus group and the department of home affairs should be offering long-stay visas to keep them working here.

SMMEs in tourism in SA, he said, are “smaller, owner-managed lifestyle businesses”, and receive no meaningful support from the government. Frost argued that the government should be focused on removing red tape and encouraging the creation of new jobs.

Mandisa Magwaxaza, co-vice-chair of SATSA agreed, adding that there is a need for the public sector to become more flexible and creative, not only with the frustrating issue of visas but also with appropriate access to finance for SMMEs through the sector training and education authority and the small enterprise development agency, which should share a single database for these businesses.

She pointed out that — apart from changed attitudes to xenophobia — market intelligence is needed to attract African travellers. Shopping tourism and health tourism should be the focus of targeted campaigns, with leisure tourism campaigns following.

The diaspora, she said, is another important market and should be encouraged with a policy of diversity, access and inclusion.

“If your business is not online, it doesn’t exist to the youth,” said Phakamile Hlazo, CEO of Zulu Nomad, emphasising the need to appeal to millennial travellers, who are experiential and seeking out authentic, immersive experiences.

Zulu Nomad offers their “Innovate Tourism” programme to SMME owners and employees. If SMMEs are to thrive, communities must be accountable for the safety of every tourist to the country, she said.

This article was paid for by the ILO.