We’re living in a South Africa disrupted. Disrupted by a relentless pandemic that constantly throws us curveballs. Disrupted by a shaky economy that needs urgent bolstering. Disrupted by civil unrest on a scale we have not seen in our democratic nation before. It’s difficult among all these challenges to see hope, resilience or even sustainability in the future.
Yet, for me, disruption may also ignite a bold new beginning. I believe we should use the disruption and crises we’re faced with to sharpen our resolve to build our nation and the African continent. The time is ripe for industry and stakeholders to rally together and collaborate. Now is the time to use this disruption to catapult us into a more inclusive, more resilient, and more sustainable path towards the future.
It will take a lot of blood and sweat. We need people on the ground, pulling up their shirtsleeves and getting their hands dirty as they begin rebuilding. But, with patience and perseverance, I believe the rewards will be bountiful.
My conviction in tourism has never been stronger than it is now. Despite the challenges we’re facing, I have an unshakeable faith in the powerful socio-economic, cultural, and nation-building value of tourism in our country as well as the continent. And this underpins my determination to make a powerful investment case for tourism.
There are a variety of indicators to look to. To measure economic growth prospects in tourism. From GDP growth outlooks to travel demand growth projections. Because the world is currently experiencing turmoil it is advisable to adopt the long view. It might not be that crystal clear – there are promising signs that motivate the case for tourism.
Private-public community partnerships
Government is increasingly accepting the role of private-public-community partnerships in its drive for GDP growth. Recent announcements regarding proposed expansion of the Durban harbour for instance - with a required investment quantum of R100 billion (€5.87bn) – invites significant private-sector investment and participation. It is an indication that we will see increased impetus to roll out more projects. These have a positive impact on investment and GDP growth. The World Bank is optimistic about South Africa’s GDP growth in 2021. Its South Africa Economic Update Edition 13 predicts 4% growth supported by the global recovery, the vaccination roll-out, and favourable commodity prices (World Bank 2021b, Zeufack et al. 2021). Overall GDP growth is positive news for the tourism sector.
Tackling unemployment is even more critical. The same World Bank report titled Building Back better from Covid-19 with a special focus on jobs highlights the importance of job creation for sustainable economic growth. It recommends a four-blocks policy package for accelerated employment recovery. One of the low-hanging opportunities is that increasing the rate of self-employment – without decreasing the other forms of employment – to 30% could change the landscape considerably.
“In South Africa only 10 percent of employed workers are self-employed, against about 30 percent in upper-middle-income countries on average. A rough but striking illustration is that if self-employment were to reach levels more typical of upper-middle-income countries, unemployment in South Africa would be about half its current rate. A rate of self-employment of 30 percent would increase the number of workers by about 3.5 million, or about half of people who are currently unemployed.”
These figures begin to create targets for us in the tourism sector. With a common vision then we could better invest and drive change.
‘Collaboration, critiquing and engagement’
My vision is one of collaboration, critiquing, and engagement with every stakeholder in the tourism sector. By eschewing our silos and coming together to share our expertise, ideas, and methodologies we have a better chance of re-thinking and re-imagining the tourism sector to mitigate the type of disruptions that have brought us to our knees recently.
Collaboration should include entrepreneurs, businesses, government, investors, communities, researchers and more. Every facet of the tourism sector must be drawn on to rebuild a tourism economy that is more robust, fruitful, and sustainable for the future.
McKinsey’s How South African SMEs can survive and thrive post COVID-19 report for instance, rightfully points out that small and medium-sized enterprises (SMEs) employ between 50 and 60 percent of the country’s workforce across all sectors, and are responsible for a quarter of job growth in the private sector. Because the tourism sector is dominated by SMEs, this underscores the importance of retaining and saving as many SMEs as possible in the immediate term, and growing their numbers in the long term.
Entrepreneurs, where it all starts, are the risk-takers who we need to support and bolster. We need to hear their plans and find creative and innovative ways to ensure these plans reach fruition and are sustainable in the future. If we all accept and embrace the role of entrepreneurship and SMEs, then collaboration between government, banks, investors, development agencies to provide impactful and results-driven support is imperative.
Big businesses are specialists with proven track records. They’re vital to share their wisdom and experiences. Supplier development by big business is an area that could have a positive impact on SME development and support. McKinsey recommends five elements:
“Corporates more generally could enable SMEs by focusing their supplier development for longer-term scale and competitiveness. We recommend five elements for private sector players to consider as part of their supplier development processes to both serve their needs and ensure the viability and sustainability of their SME partners as a business imperative, and not just for social responsibility purposes.
- Develop clear selection criteria for suppliers up-front. For example, by defining the categories in which to develop suppliers. This could be based on ownership structures, business performance, or other criteria.
- Assess the capability gaps that exist within suppliers up-front and develop plans to help them close these.
- Build funding and capability requirements into the contract to create sustainability.
- Simplify contractual terms and conditions and required paperwork for SMEs that often do not have large/dedicated commercial teams.
- Establish regular check-ins and course correction sessions throughout the lifecycle of the suppliers.”
Government too is vital. It is through them that policy and regulations to support the sector are enacted. The investment community will play an important role as advisers and thought leaders in re-strategising how best to channel investment into tourism.
As we rethink and rebuild, the value of community involvement in the tourism sector cannot be stressed enough. From rural communities to women and youth – there are so many innovative and creative ways previously marginalised communities can be drawn in to rebuild and grow the sector. Now is the time to think about these and find ways of making them a reality.