With 25% of South Africa’s workforce and over 50% of our youths between 15 and 25 years of age out of a job, the beloved Rainbow Nation is in dire need of employment opportunities. The key to solving this problem of mammoth proportions is stimulating entrepreneurship and investing in small, medium and micro enterprises (SMMEs) – particularly those operating in the tourism sector, experts claim.

Over the past decade or so, the South African tourism industry has grown from strength to strength, and has become one of our country’s major economic engines.

To give an indication: while 2008 drew 9 699 365 international holidaymakers, 2009 accounted for 9 933 966 foreign arrivals – an increase of 3.6%. These figures show a 120% growth since 1994, when our nation welcomed just less than 3.9 million international holidaymakers.

Statistics from the Department of Environmental Affairs and Tourism (DEAT) further indicate that South Africa’s leisure and travel industry in 2009 accounted for 7.4% of our national gross domestic product – an increase of 2.7% compared to 2008.

In that sense, and in that particular year, tourism was more important than the mining industry combined with agriculture – which, in 2009, jointly contributed 7% to GDP.

The figures above are solid proof that South Africa has a robust tourism industry.

It is worth noting that 2009 was the year the world found itself in the middle of one of the worst financial crises in recent history. The downturn, which is far from over, seemingly did not deter visitors from Europe and the United States from visiting South Africa.

Last year was yet another bumper tourism year. In the first nine months of 2010, more than six million foreign holidaymakers set foot on South African soil – an increase of 17.1% compared to the same period the year before. The 2010 Fifa Soccer World Cup undoubtedly played a significant role in this growth.

Apart from being a major income generator, the tourism industry is a crucial job creator. According to Statistics South Africa, tourism in 2010 accounted for 4.3% of South Africa’s employment. In other words, if it were not for this particular sector, more than 528 000 people would have been without a job in 2010.

This is huge. With one in four South Africans being unemployed and looking for work, and another big chunk of the population without jobs not looking for employment, joblessness is one of our country’s biggest headaches.

Unemployment, no matter how you look at it, allows poverty to roam free and leads to all sorts of social instability. This puts immense pressure on national coffers: over 80% of South Africans depend on public- and state-sponsored healthcare because they cannot afford insurance. Our nation’s heavy disease burden does not help the situation. In addition, millions of South Africans depend on state grants, public education, and other state-sponsored safety nets.

The aforementioned would not have been a problem if there were enough taxpayers. Unfortunately, out of a population of 50 million, just under six million pay their taxes. In essence, having just below one-tenth of South Africans supporting the rest is unsustainable.

That is why jobs, hundreds of thousands of them, are needed desperately. The government is very well aware of this. In an attempt to tackle the situation, authorities have committed to creating 10 million jobs in the years to come. Tourism has been singled out as one of the core focus areas.

“Between now and 2020, we want to create 225 000 jobs in this sector. We will do everything possible to promote and grow the tourism sector so that we can achieve these developmental goals,” President Jacob Zuma said in March 2011, shortly after signing the Global Leaders For Tourism Campaign.

Experts claim that in order to grow the number of tourism jobs, one should look at ways to grow and further develop the SMMES that operate in this field.

“To create the thousands of tourism jobs (President) Zuma spoke about, more needs to be done to assist SMMEs who want to expand their footprint,” says Salifou Siddo, chief executive officer at the Tourism Enterprise Partnership (TEP).

“If SMMEs are given the opportunity to grow and develop, they will – at some stage – find themselves in a position to hire more people.

“That – the job creation potential – is one of the big differences between small and large companies,” he points out. “Big players are already where they want to be and are unlikely to grow the number of new job opportunities much. Smaller enterprises often want to grow; and if they are allowed to do so, they will at some point or another increase the number of employees.”

The TEP is a public-private small business development initiative founded in 2000 by the Business Trust, the DEAT and Corporate South Africa.

Between 2000 and 2011, the TEP – using public and private funds – invested R450m in more than 4 000 tourism SMMEs across South Africa. These ranged from bed & breakfast establishments and manufacturers of souvenirs, to tour agencies and travel organisations.

With job creation in mind, the initiative aims to improve the candidates’ marketing strategies, their access to different markets, and to spruce up their product and service skills while enabling them to make their business operations economically sustainable.

“The recipients we helped over the past 10 years made way for 64 000 new permanent and full-time jobs, and jointly generated R5 billion in revenues,” Siddo says, noting that the TEP is not investing in tourism SMMEs in the classic sense. “Our aim is not to make profit. We help tourism SMMEs, for instance, to improve their marketing strategies, how to gain access to the market, and with hospitality training.”

When it comes to the question of who is responsible for helping tourism SMMEs grow so they can hire more staff members, he says that this needs to be a common goal of the government and the private sector: “The corporate world needs to come on board, too, for they have the resources.”

Case study

One of the thousands of businesses that have benefited from TEP support is Zulu-lulu Trading. Situated in the heart of the KwaZulu- Natal Midlands, the people at Zulu-lulu make quirky handmade ceramic products including figurines, vases and tableware. The company currently employs around 10 people, who all have permanent, full-time jobs.

“We started in 2006 with no staff, as my wife and I did everything ourselves,” recalls Stuart Tompkins, husband of Zulu-lulu founder and owner, Trayci Tompkins.

“We at some point wanted to grow. To reach that goal and to get more exposure, we decided to get into trade shows. Unfortunately, we could not afford the stand fees, which can be as high as R16 000. We approached the TEP, which gave us financial assistance to exhibit at large trade fairs.”

This support eventually led to greater exposure, allowing Tompkins and his wife to hire staff members.

“We expect to grow further, as we are about to open an art gallery. We have a retail outlet in the Midlands, too. While growing, we hope to hire more people,” he says. “We, however, want to take it slow. The higher you aim, the harder you fall when things go wrong. We do not want to end up having to fire people.”

Siddo stresses that the issue of unemployment in South Africa, and the necessity to find solutions, has to be taken seriously by everyone. “If we do not address this challenge, we are headed for a road to nowhere.

“If we do not work together in fighting joblessness, we will not achieve the ideal of a democratic, equal society we once fought for.”

Tompkins agrees with Siddo. Like many South Africans, he is very much aware of the unemployment issue that faces this country. “Stimulating entrepreneurship in general and enabling small companies to grow so they can hire more staff is crucial in order to solve this problem,” he says.

To incentivise big corporations to invest in the TEP, thus in tourism SMMEs, the initiative earlier this year came up with a brand new initiative: the Enterprise Development Portfolio (EDP).

“In return for investing into the TEP, big companies qualify for enterprise development points for their BBBEE scorecard,” Siddo explains.

To be BBBEE-compliant, companies that operate in South Africa must allocate 3% of all net profit after tax to enterprise development. “They can now do so via our EDP initiative, which is verified by South Africa’s leading economic empowerment rating agency, Empowerdex. It is a win-win situation,” says Siddo.

He adds that BBBEE compliance is merely one of the many benefits of investing in the TEP. “You as an entrepreneur get to participate in the story of job creation in South Africa, and make this country a better place,” he notes. “Creating jobs in tourism will lead to a growth of this particular sector. This, in the end, will also benefit those companies who are investing in SMMEs.”

Rennies Travel is one of the businesses that have invested in the TEP in return for enterprise development points. The travel agency invested R300 000.

“Our involvement with TEP is driven by our objective to contribute positively to the involvement of the travel and tourism industry in initiatives that will achieve real transformation,” the company stated in a press release.

“By partnering with TEP, we are facilitating the advancement of entrepreneurial skill that is so critical to the alleviation of unemployment in the country. We believe that upcoming small enterprises will be the foundation for future growth of the travel and tourism industry in South Africa.”

Miriam Mannak

Tourism facts

• Between 2003 and 2009, 63 million tourists came to South Africa (DEAT);
• Business travellers, including conference goers, contributed R2.3 billion to South Africa’s total tourism revenue (DEAT);
• 40% of business travellers returned to South Africa within five years (DEAT);
• South Africa ranks 32nd globally for business tourism (Southern African Association for the Conference Industry);
• The average tourist spends R9 900 while in South Africa (DEAT);
• One job is created for every 12 foreign arrivals in South Africa (DEAT).

• |2012-02-02 08:59:16 mfudzi wa mambo  - mr
  its not correct to say tourism is the solution to unemployment problems. whilst tourism is one of the fastest growing industries, its futile to beleive that it is the soluton for the following reasons:- 1) not every unemployed person has tourism knowledge, 2) not even is tourism able to absorb all graduates who have tourism training, 3) not all communities are tourist destinations. i believe the key to unemployment is community developement. this way, every unemployed person in whatever field, has an opportunity to be useful. lets get our priorities right.
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