Small and medium-sized enterprises (SMEs) in the tourism industry are frequently overlooked and underutilised in South Africa, with the focus being mainly on more established businesses that are seemingly reluctant to support these local players.

South African Tourism (SAT) recently hosted a mega-familiarisation trip for 80 members of the Nordic travel trade. The trip placed emphasis on the stimulation of inclusive economic growth in the local travel industry, compelling DMCs to work with black-owned SMEs that are not currently being adequately packaged by larger product owners. 

Founder and Director of Seeza Destination Network, Septi M. Bukula  agrees that South Africa’s tourism SMEs are not being packaged adequately and, as a result, organisations and the country’s overall tourism offering are losing out.

Managing Director of Southern Africa 360, Collin Thaver, says younger organisations are not being given equal opportunities, as the spotlight is still placed on larger, established companies that already have long-standing relationships with international buyers. “It is difficult to change the mindsets of (Nordic) agents.”

Large DMCs naturally receive preferred rates, adding to their competitive advantage. Such rates are generally not afforded to SMEs. “This is a major challenge that requires open discussion. Equal opportunities should be given to younger companies who have the potential to produce,” comments Thaver.

This is a crucial problem, according to Bukula who says: “Once again, some will argue that this is pure market economics at play – you offer your best prices to those that bring you volumes.

“But in the case of SA, where historical structure of the economy is such that SMEs are generally marginalised, and where we all need to give urgent attention to the pressing question of inclusion, should we not be asking ourselves hard questions about whether we really can afford the luxury of following such purist market economy orthodoxy? Should we really not be doing things differently? It is incumbent on larger players to provide answers to these questions.”

Preferred endorsement of products should be given to SMEs that have proved that their services are up to standard comments Thaver, who suggests organisations such as SAT who should showcase these products, as well as support SME businesses to a larger degree, in order to ensure they are not overlooked by overseas buyers.

Bukula believes that by supporting SMEs to organise themselves differently and thereby strengthen their international competitive capabilities, players like SAT can start to gradually bring about a shift in buying practices, by slowly changing the narrative that dealing with SMEs is challenging.

“Even more importantly, government entities should lead the way by channelling serious business to SMEs. Secondly, where a business event is organised by the government itself, it should show the way by appointing SMEs as service providers,” adds Bukula.

As no radical change seems to be materialising from the efforts of transformation in the tourism industry, Thaver says to combat this issue, the Southern Africa Tourism Services Association (Satsa) needs to play a role in ensuring foreign-based companies wanting membership are directly linked to registered, owned, managed and operated South African businesses, as well as contracting hotel groups to ensure preferred rates are given to younger black-owned companies.

Furthermore, government needs stricter legislation, comments Thaver. “Current transformation is not at operational level, only boardroom.” In addition, he suggests aggressively promoting companies (SMEs) that have the ability to meet requirements and satisfy demand, such as Southern Africa 360.

“SMEs are not looking for handouts but rather opportunities. Hotels with rates, government, Satsa and SAT all need to open up avenues. The time for talking is over,” says Thaver.

SMEs need to learn to organise themselves differently, they need to stop viewing themselves as competitors and start to collaborate more, suggests Bukula, who says answers to these questions lie with the SMEs themselves.

“Gone are the days where SMEs think answers to their challenges will come from others,” he concludes.