CLAIRE BISSEKER: When tourism flourishes, so does the economy

It’s a challenge to find good economic news in SA, but if there is anything that spells hope for the economy it is tourism. And right now the Western Cape is shooting the lights out. 

The number of two-way international passengers through Cape Town International Airport in the first eight months of 2023 was up 64% compared with the same period in 2022. In August alone, footfall to 36 attractions across the province exceeded 607,000 visitors — that’s 72% growth year on year. 

The province attributes this mini boom to innovative marketing as well as the fact that over the past year seven new international routes were added to Cape Town’s network. Western Cape finance MEC Mireille Wenger estimates that the airport’s seat capacity will increase by 25% this summer season, which means international seats will exceed 1-million for the first time. 

Each year foreign tourists arriving by air inject about R24bn into the Western Cape economy, supporting more than 10,000 jobs. Cruise ships generated another R1.2bn and roughly 1,800 jobs in the six months to May. 

Tourism is a catalytic sector with low barriers to entry, making it ideally suited for absorbing young, inexperienced workers — the kind SA has in abundance. It has rightly become the latest focus area for Ravi Naidoo, CEO of the Youth Employment Service (YES) — a nonprofit organisation that runs the country’s biggest job creation programme involving 12-month internships. 

YES channels young people with potential from disadvantaged backgrounds into private sector internships paid for by the companies themselves. In return, businesses gain up to two levels on their broad-based BEE scorecard, can integrate YES job creation into their environmental, social & governance strategies, and develop a future talent pipeline. 

The initiative has generated more than R6.5bn in youth salaries and more than 126,000 jobs in just four years. In the year to March 32,578 young people went through the programme, up from 25,287 the previous year, an increase of almost 30%. In the year to March 2022 the country’s 21 sector education & training authorities (Setas) provided just 3,607 internships, while the economy as a whole created only 139,000 jobs for people under the age of 35. 

“I would love to generate a million jobs [the YES programme’s original goal] but we’re doing pretty well compared to the Setas and the economy as a whole, and we get no money from the fiscus,” says Naidoo.  

Though about 75% of candidates are employed in the 1,557 corporates that sponsor their salaries, the other 25% are channelled into high-impact areas that are highly labour absorbing. 

YES is running the biggest drone training programme in the country in Alexandra and Saldanha, with 106 young people having qualified as pilots or technicians so far and 500 more poised to join. It’s also channelling talent to the solar photovoltaic installation industry and, most recently, to the tourism sector. 

This week, YES, together with Sanlam as the anchor sponsor, is launching the Youth4Tourism initiative, a R60m multiyear programme to provide paid internships to 650 young people in tourism. Many will be the first in their families to get a private sector job. 

Typically, about half of all YES interns are subsequently absorbed into permanent jobs or long-term contracts, but as many as 15% start their own businesses. That’s a pool of about 19,000 young entrepreneurs so far. “We’re not trying to save the day,” says Naidoo. “It’s not a magical programme. It’s a private sector contribution to the bigger picture.” 

The Western Cape government backs the Youth4Tourism initiative, which stands to reason given that it wants to double the number of visitors to the province by 2035, a target that seems well within reach. “We do this because more tourists mean more jobs,” says Wenger. “When tourism flourishes, so too does our economy.” 

Sometimes getting growth going really is that simple. Other provinces should take note. 

• Bisseker is a Financial Mail assistant editor.