Transformation in South Africa’s tourism industry has taken great strides, yet there are still many bridges to be crossed to achieve equal representation of cultures, genders and businesses within the industry.

A number of studies, reports and workshops have been conducted to ascertain what challenges are facing transformation in tourism, what measures have been put in place to overcome them, and the way forward.

The Tourism Broad-Based Black Economic Empowerment (B-BBEE) Charter Council holds four annual briefings to the Committee on Transformation in the tourism sector. The African Journal of Hospitality, Tourism and Leisure (AJHTL) also released a paper on ‘Black Economic Empowerment-led transformation within the South African accommodation industry’. These, together with a number of players within the tourism space, identify a number of key challenges time and again. Here are the top challenges.

A vast number of tourism enterprises in SA have no black female shareholding, with absorption of black females at directorship level still very low. Recruitment and retention of black skilled staff presents a challenge in meeting employment equity targets, particularly in large enterprises where more specialised skills are required.

Access to adequate funding is a major challenge in small- to medium-sized enterprises (SMMEs); and an awareness and understanding of the Tourism B-BBEE sector code, in comparison to the Department of Trade and Industry’s generic code, is low.

The bill-back system also stands as a barrier to business growth amongst SMMEs, in particular black-owned travel and accommodation businesses. The ‘stay now, pay later’ principle leaves a number of businesses in difficulty as monies owed along the value chain between the entity booking the travel and the accommodation venue can leave the end service provider in financial distress. Some tourism stakeholders have alluded to government being the main transgressor, where credit given for travel and accommodation is either paid late or not at all.

A need has also been identified to boost demand in tourism through intensified destination marketing efforts. A number of regional tourism authorities have taken this to heart and are exploring creative ways to drive the marketing of their destinations. Knysna Tourism, for example, recently launched a destination marketing campaign, #SpiritofKnysna, with a video showcasing the lagoon, forest and beaches.

The Tourism Marketing Levy South Africa is a national fund whereby a 1% levy is charged to the consumer to use specific tourism services in SA. Funds are collected and primarily used by South African Tourism to promote SA as a preferred travel and tourism destination. Some stakeholders have suggested that this levy be considered as a transformation fund.

The establishment of the Tourism Transformation Fund (TTF) by the Department of Tourism, for new black entrants and existing businesses, whereby R120m (€7.53m) has been provided over the next three years, has been seen as too little to empower businesses.

Another challenge facing the achievement of transformation is access to markets for small businesses. Entry to market requires capital, but the required funding is not available. This has been put down to corruption within the value chain, with preferred suppliers being awarded tenders, as opposed to bringing smaller enterprises on board. Furthermore, sufficient funding required to interact with potential markets through pivotal events such as the Travel Indaba and World Trade Market Africa is limited to SMMEs, so many are not able to exhibit and connect with potential customers.

Further challenges

There are many more challenges plaguing transformation in the tourism sector at a micro-level, with some in the procurement sector including:

• Lack of proper knowledge, skills, and capacity
• Non-compliance with supply chain management policy and regulations
• Inadequate planning and the linking of demand to budget
• Accountability, fraud, and corruption
• Inadequate monitoring and evaluation of the supply chain management
• Unethical behaviour
• Too much decentralisation of the procurement system
• Ineffectiveness of the black economic empowerment policy

(Study: Ambe and Badenhorst-Weiss (2012: 250)

So what can be done to work with these challenges to drive the transformation momentum? A number of solutions are suggested in the AJHTL paper, including but not limited to:

• The SA government must focus on the systematic and concerted development of new entrepreneurs.
• A serious criticism of BEE over the years has been the ‘forced’ employment of black people in positions where their skills do not match the position occupied. A focus on providing quality education and upskilling of young people is required, to add value to the positions they occupy.
• ‘Fronting’ – defined by the Department of Trade and Industry as “a deliberate circumvention or attempted circumvention of the B-BBEE Act and the Codes” – makes it difficult for procurement objectives to be met. This challenge can be overcome by making current tender processes transparent and open to public scrutiny, allowing proper verification and vetting by interested institutions. The secrecy behind tender processes can lead to tender process mismanagement.
• Equal pay for the same job, irrespective of gender and race, must be enforced. The private sector has been found wanting in this regard. The government needs to look into the issue of fair pay – in many cases, women are remunerated less for the same type of job as their male counterparts, and studies have found that black people are paid less for the job as their white counterparts (Bosch, 2015, Peyper, 2016, Agence France-Presse, 2017, Mgudlwa, 2017, and Fisher, 2017).
• Timelines and accountability for the eradication of the BEE policy should be set. The main reason for this is to ensure that the country will move away from race-based employment policies and shift towards skills-based employment policies. This will also signal the fact that government is cognisant of what it wants to achieve and not allow for the current policy to be in place indefinitely, which would indirectly begin to discriminate against white South Africans and will harden racial perceptions and stereotypes as opposed to building an inclusive society.