The difficulties faced in transferring ownership of large tourism enterprises to black South Africans were highlighted on Monday, with the release of the South African Tourism Industry Empowerment and Transformation annual review for 2003.
The second annual report, from the Tourism Business Council of South Africa (TBCSA), found that while in some respects little progress has been made, the industry leaders’ survey demonstrates a high level of commitment to black economic empowerment (BEE) objectives among established tourism enterprises even if the commitment is not always accompanied by knowledge of how to proceed.
Issues of employment equity and skills development are high on the agenda and there is optimism that the management levels of the industry will become substantially more representative in the next five to ten years as new, skilled
entrants begin to move up the ranks.
Commitment to affirmative procurement is high, although many organisations still need to formalise this and some small progress has been made in advancing black ownership.
The report concluded that a baseline empowerment scorecard for tourism showed some areas where the industry could rapidly improve its performance.
A number of organisations have no formal BEE policies in place but do have either an informal commitment to the principle or a number of other policies that could contribute to an empowerment policy. It would take a relatively small investment of time and effort for these organisations to convert these to formal policies and strategies, TBCSA said.
Similarly, several organisations claimed informal commitments to affirmative procurement, but had no policies in place. Documenting these commitments in the form of a written policy will lend clarity and focus to these efforts, TBCSA added.
The report added that nobody knows what proportion of the total tourism industry is accounted for by small and/or emerging enterprises. Large organisations probably account for the majority of both turnover and employment — but if tourism is to become a driver of growth and employment, small enterprises will have to be supported more effectively than is being done at present.
Of the 30 organisations surveyed, eight were associations, statutory bodies, 100% state owned enterprises or other organs of state for which ownership was not relevant. Of the remaining 22, only six had greater than 25% black ownership.
The six organisations with greater than 25% ownership are: The Don Group (46%), Misty Hills (35%+); Rennies Travel (25%), Connex Travel (53%), Southern Sun (51%) and Thebe Tourism (70%). A number of enterprises said they were in the process of negotiating the entry of black equity partners.
Of the 24% organisations that had boards, 18 (75%) had at least one executive or non-executive black board member. However, more encouragingly, half of these 18 companies had more than 25% black board members, TBCSA said.
Of the 30 organisations surveyed, 18 (60%) had a formal affirmative procurement policy in place. TBCSA said this was a minor improvement over the previous year, when 9 out of 16 organisations (56%) that purchased goods and services from outside suppliers on any kind of large scale had formal affirmative procurements policies in place.
Of the 12 organisations without formal policies in place, six expressed a commitment to affirmative procurement which might be termed an informal policy. State-owned enterprises, NGOs and statutory bodies led the way, all having
formal policies in place.
In general, those without any affirmative procurement policy in place were more likely to express fears about the ability of black suppliers to meet quality and service requirements.
Among issues raised by respondents were a lack of black owned suppliers, particularly in more significant spend categories; some black owned suppliers
were uncompetitive and lacked management expertise and a lack of market
awareness of black suppliers.
The study was conducted the by research houses Letsema and Infonomics and
was funded by the WK Kellogg Foundation.
The TBCSA first identified the issues of empowerment and transformation as
priorities as early as 2000. As an initial step, a charter was drafted and signed by stakeholders in the tourism industry. This was followed by the first annual review released in June 2002 and now the latest review, released on Monday. – I-Net Bridge