Market stall selling clothing and accessories in the town center of Darling in the Western Cape region of South Africa. (Education Images/Universal Images Group via Getty Images)
Small medium and micro enterprises (SMMEs) in the tourism sector are battling to recover from the fallout of the Covid-19 lockdowns, with hindrances including affordability, market access, digitisation and lack of representation.
Industry leaders met last week to discuss how to revive the SMME tourism sector post-Covid-19, saying that smaller players are usually excluded from important conversations that will likely affect them.
SMMEs in the tourism sector comprise local bed and breakfasts, localised nature and cultural tours, agri-tourism, backpacking and chesa’nyamas.
The issue of representation was highlighted, because SMMEs are usually left out of conversations of the sector’s revival.
“SMMEs are very fragmented in how they have structured themselves, largely because their struggles are so local and so personal, whereas big organisations can pay big fees to other representative bodies who will represent their interests in government discussions,” said Jerry Mabena, the chief executive of Motsamayi Tourism Group.
Mabena said that even the Tourism Business Council of South Africa was not representative of SMMEs, with the majority of its members being the “big guys”.
“I think it’s a reflection of the whole discussion around the first and second economy…” he said.
The concept of the first and second economies, first talked about in the South African context by then president Thabo Mbeki in 2003, assume a fundamental divide based on socioeconomic exclusion. The second economy comprises economic activities that are perceived to supplement the first or main economy.
SMMEs play an important role in the economy as they can be key drivers of economic growth, innovation and job creation. In South Africa in 2019 SMMEs provided employment to about 47% of the workforce, with their total economic output accounting for about 20% of GDP, according to the Johannesburg Business School.
With such a significant contribution both to the country’s output and employment, why are SMMEs the last to be considered when planning for the economy’s revival post-Covid-19?
Mabena said SMMEs are often left out of legislation and that is why their contribution is not taken seriously.
“Legislatively there is a lot of stuff that leaves us out of the conversation and part of it is because we have not organised that well … It’s an unfortunate thing but I am hoping that an initiative like this will, at some point, have a significant aggregation of those people so they can start having a bigger voice,” he said.
Market access is a big hindrance to the revival of the tourism SMME sector because businesses can find themselves isolated in their little corner of Keiskammahoek or Thohoyandou.
“In the past, access to the market meant that you had to have an agent who would give you visitors or a tour operator who would lead people to your restaurant, but technology has broken that barrier and now SMMEs can have direct access to the market,” Mabena said.
“In a situation like that it would be exciting to get someone booking accommodation in a village in the Eastern Cape from Germany. That is the level of direct access we want to start seeing and those barriers can be broken.”
Another panellist, Septi Bukula, the founder of Seeza Tourism Growth Network, said digitisation remained a challenge because travellers had moved online. Although SMMEs wanted to increase their role in this space, education and resources were often lacking.
Dual pricing has plagued the tourism sector and, for years, dissuaded locals from travelling locally, until Covid-19 hit. This is another area that hinders the revival and growth of the SMME tourism sector, the panellists agreed.
“Since the advent of Covid-19 we dropped the prices by 50% to encourage South Africans to travel and they responded incredibly. The challenge now post-Covid-19 is that, as international markets open, we want to charge the dollar price, but we can’t ignore the South Africans who supported us throughout.
“We made [local travel] unaffordable for South Africans for the longest time and it’s time we change that,” Mabena said.
Anathi Madubela is an Adamela Trust business reporter at the M&G.
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