Sanlam Gauge workshop highlights lack of progress in a sector that is critical to the economy and a driver of jobs

The South African tourism industry is a key economic driver, contributing 9% to GDP and 4.5% of jobs. The sector was hardest hit by Covid-19, with tourist volumes decreasing by 72.6% in 2020, resulting in huge job losses. To recover, transformation needs to be on top of the agenda,  agree industry leaders.

Industry leaders joined Andile Khumalo, co-founder of Sanlam Gauge, in an online workshop to discuss challenges and solutions that can result in meaningful transformation.

The workshop was the fourth instalment of sector conversations after the release of Sanlam Gauge, a report that measures the level of B-BBEE activity across sectors.

Empowerdex ratings agency MD Lerato Ratsoma said the sector sits at a level-1 recognition with 110 points, and commended companies that put an effort to achieve their B-BBEE scores.

The tourism sector achieved 23.9 out of 27.0 points for black equity ownership, 11.7 out of 19.0 for management control, 16.6 out of 20.0 for skills development, 34.6 out of 40.0 for enterprise and supplier development and exceeded expectations with 6.8 out of 5.0 for socioeconomic development.

The workshop was punctuated with robust debates, with some participants stating that there was no significant transformation at grassroots level, where it is most needed.

Lindiwe Sangweni-Siddo, chairperson of the Tourism Transformation Council of SA, said the Sanlam Gauge report findings mirrored their sector’s 2018 state of transformation report, particularly on poor representation of women in management control.

“The reality on the ground is that the industry is untransformed. Only 11% of enterprises had black women at board, executive and senior management levels. The overall poor performance on the promotion of black management in general is a big concern for us,” she said, adding that the council consistently challenged the sector to promote black individuals, particularly women, and impart skills that will feed into management control.

As a solution to challenges that besiege the sector, the council compiled a plan of action to drive transformation.

Sun International CEO Anthony Leeming reiterated the importance of transforming the industry and said his organisation was fully committed. However, he explained, there were unintended setbacks such as losing top black professionals to other sectors. He also highlighted the challenge of having few women in senior leadership positions in an industry where they are the majority.

“We probably have about 55% female representation, yet when it comes to leadership it does not follow through. One of the reasons is related to security concerns and as a result senior females don’t want to stay at work until 2am in a 24-hour business.”

Business Tourism Council SA CEO Tshifhiwa Tshivhengwa urged sector players to introspect and make a distinction between achieving targets versus transformation.

“Without real transformation that is seen and enjoyed by everyone on the ground, there is a negative impact on the sustainability of the industry. The last thing we want is a repeat of the July riots that took place in KZN and Gauteng, by communities who feel that they don’t benefit from tourism assets next to them,” said Tshivhengwa. He called for teaching of the business of tourism to empower disadvantaged people, particularly youth, to gain a broader understanding of the value chain of tourism.

Nesang Maleka, director of Mzansi Tourism Experience and the youngest member of the Tourism Transformation Council of SA, also advocated for deliberate skills development and meaningful inclusion of young people in the value chain of the sector, beyond just arts and crafts. He called for the overhaul of the tourism curriculum, especially at Technical Vocational Education & Training (TVET) colleges, which are tertiary institutions of choice for youth in townships and rural areas.

Small Tourism Enterprise Association CEO Percy Koji said collaboration opportunities to ensure that SMMEs grow were there.

“I believe that for smaller guys to grow and increase capacity, we need to explore how best we can collaborate and have real impact across the sector and help our members grow. The most critical element is to look for opportunities to engage organisations such as Sanlam on how can we partner better with the entire sector.”

Jerry Mabena, CEO of Motsamayi Tourism Group, said the B-BBEE legislation, in its current format, was missing the application of moving the economy from urban to rural environments.

“We miss the point of what tourism can do to transform the economy and turn around societies. Fundamentally, it has to go beyond just scoring points on the scorecard, but drive economic growth in the sector.”

Mmatsatsi Ramawela, a tourism transformation council member, said at the core of transformation is inclusive growth and economic participation of previously disadvantaged individuals, especially black women. She appealed to business and government to join hands and empower the country’s majority, who rely on social grants to survive.

“It starts with a common vision to make this country great. We need all hands on deck to empower the majority of South Africans, who are poor, and give them opportunities to become entrepreneurs. Tourism can make a real difference.”

Millat Properties CEO Hamza Farooqui said: “If we are serious about transformation in our sector we need to focus on real entrepreneurship, an insistence and no compromise on meritocracy and patient capital. If we can encourage risk takers to grow in this business, nurture innovation and customer-centricity and provide the right capital to them, we will transform.”​

Wrapping up the debate, Sanlam’s chief transformation officer, Ray-Ann Sedres, pointed out that the tourism sector touches every single South African regardless of their gender, background, race or economic status.

She said the industry has an opportunity to create inclusion beyond the scope of the scorecard and set a tone for nation-building, to add value and have a greater impact through collaborations with other sectors.

The Tourism Transformation Council of SA committed to collaborate with Sanlam Gauge in 2022 on their sector survey to measure transformation inroads in the sector.