Research on the Performance of the Services Sector

4.14. Identification of high potential subsectors

The main subsectors within the industry are accommodation, transport, tour operators, and entertainment and tourism experience. Within South Africa there are an estimated 5000 travel agencies and more than 800 tour operators. The number of registered tour guides in South Africa in 2006 was 10 115. In terms of vehicle hire, there are an estimated fifty small car hire operators in existence. Accommodation businesses⁴⁴ are spread across South Africa, and there are an estimated 230 timeshare resorts in operation, approximately 8000-9000 guest houses and B&Bs, and 1000 private game reserves and lodges. These accommodation figures do not include hotel accommodation and backpackers.

Given the information available publicly regarding opportunities within the tourism industry the subsectors that have been identified as high potential growth subsectors are accommodation, transport, and entertainment and experience. These opportunities are discussed in more detail in the data analysis section.

4.15. Job creation potential

National goals for job creation in the tourism industry in South Africa have been set out by the Department of Tourism in a Medium-Term strategic plan for 2010/11-2014/15. The first strategic theme in the report focuses on ‘People Empowerment and Job Creation’, as tourism is described as, among many definitions, a labour intensive industry with the capacity to create jobs in a variety of economic industries, such as arts and culture, sport, agriculture, transport, and construction⁴⁵. The goal of the estimated 640 000 tourism related jobs by 2015, compared to the 527 630 jobs in 2005, is planned to be achieved through the means of two objectives⁴⁶:

To contribute to job creation through the use of labour-intensive methods targeting the unemployed, youth, women, the disabled and SMMEs

To build and improve the skills and capacity levels of the Expanded Public Works workers employed in the Social Responsibility projects

This goal further supports the plan of the African National Congress (ANC) to create 225 000 new jobs in the tourism sector by 2020. The Tourism Enterprise Partnership (TEP) is also greatly committed to achieving the government’s 2020 goal and have already set clear targets for the organisation to achieve, among many, 10 000 new jobs in the current financial year⁴⁷.

At present there is no database in South Africa that captures all the entities operating in the tourism sector. This makes the quantification of the exact size of this sector very difficult, which consequently makes accurate skill planning very problematic. This is due to the large amount of Small, Medium and Micro Enterprises (SMME) that dominate both the tourism sector and its subsectors, which are too small both in size and income to be registered on any official national databases. However, when taking into account those entities that are registered on one or more official databases, the total number of entities in the tourism sector come to 41 740 entities, who employ around 378 000 staff members.

The breakdown of the estimated total amount of entities into its sub-sector, are illustrated in the table below:

Table 16: Number of employers and employees per sub-sector

Sub-sector	Number of employers	Percentage	Number of employees	Percentage
Hospitality	28 000	67%	290 000	77%
Travel and Tourism	6 200	15%	28 000	7%
Gaming and Lotteries	740	2%	10 000	3%
Sport Recreation and Fitness	3 300	8%	20 000	5%
Conservation and Tourist Guiding	3 500	8%	30 000	8%
Total	41 740	100%	378 000	100%

Source: Prodigy – Grant Thornton, 2007, quoted in Theta, 2010

It has been estimated that those SMMEs that employ between 0 and 49 individuals account for 96.05% (20 565) of the complete tourism sector. As previously stated, SMMEs also dominate each sub-sector of the tourism sector with 96.36% of the Hospitality sub-sector, 95.99% of Travel & Tourism sub-sector, 95.92% of the Sport Recreation & Fitness sub-sector and 95.26% of the Conservation & Tourist Guiding sub-sector being SMMEs.

The statistics above imply that the tourism industry in South Africa is comprised of a large number of SMEs and as such the potential for growth of the SMEs exists as well as the potential for further SME development. Furthermore it is imperative that SMEs receive support and promotion from government and other organization to ensure that the tourism industry continues to grow and create jobs in the economy.

Some of the main reasons provided for the large amount of SMMEs in the tourism sector, are the perceptions held by upcoming entrepreneurs that tourism provides a platform for making quick money without investing too much capital; and the fact that minimal barriers exist when starting a new SMME, as there are no formal registration requirements and only basic industry specific skills are required to do so⁴⁸.

Tourism and the Film Industry’s job creation potential

Apart from the well-utilized economic industries in which tourism jobs make out a large part, the National Tourism Sector Strategy (NTSS, 2011) has highlighted that South Africa is not yet fully utilizing the potential of the filming industries in terms of job creation in the tourism industry. Due to the facts that these industries have generated revenue of over USD1 trillion in 2003; and are still growing on a rate of over 9% in the film industry and over 6% in the television industry , these industries are believed to have greater capacity, than other advertising campaigns, to reach a bigger tourism market audience. These industries are important because they have the ability to bring about education, socialization, and preservation of cultural heritage – all of which helps to establish growth and sustainability of tourism in South Africa⁴⁹.

Niche Tourism: City tourism products and services

Additionally, it is said that the 2010 FIFA World Cup attracted a new type of tourist to South Africa, who rather wanted to explore and enjoy the city life, shops, restaurants and museums, than the nature sites. South Africa has, in the past, mainly focused on advertising itself as a wildlife safari experience and nature destination, it is now challenged to focus more on what the cities have to offer to tourists⁵⁰. This may then become a new opportunity for job creation in industries such as restaurants, night clubs, wine farms, city tour operators, and other attractions located in and around the major South African cities.

Role Players or Key Stakeholders

In South Africa, the key role players and stakeholders in the tourism sector include public and private sector stakeholders. On a national level the key stakeholders include, The National Department of Tourism, South African Tourism, The Department of Trade and Industry, Tourism Business Council of South Africa, and the Tourism, Hospitality and Sport Education and Training Authority.

The roles and responsibilities of these organisations are outlined in the table below:

Roles and Responsibilities of organisations in the Tourism sector of South Africa
The National Department of Tourism (NDT)	The role of the NDT to ensure the sustainability of tourism as a contributor to the South African economy. The Department manages the core tourism data set, and distributes this and other research information to the public and private sectors.
South African Tourism (SAT)	SAT is responsible for marketing the South Africa brand as an international visitor destination. It owns the South African tourism-marketing brand, under which the global tourism campaign is managed. SAT strengthens its key marketing messages by providing quality information to visitors through its website
The Department of Trade and Industry	An objective of the DTI is to create an environment that enables investment, trade and enterprise development. These objectives have direct links to the tourism sector as it is a tool to attracting foreign direct investment to South Africa through the many attractions and products demonstrating South Africa’s tourism potential. One focus of the DTI is to transform the informal economy through the development and growth of SMME’s and there are many national funding programs to indicate the department’s dedication to this.
Tourism Business Council of South Africa	The TBCSA is a private-sector membership organisation, which provides support to the tourism industry. The TBCSA represents a partnership between government and the private sector to ensure joint responsibility tourism policy, direction and its implementation.
Tourism, Hospitality and Sport Education and Training Authority	Tourism, Hospitality and Sport Education and Training Authority, is the Sector Education and Training Authority (SETA) established to equip people with skills and training in these sectors; those who are employed or those wanting to be employed.