TOURING THE LOCAL ECONOMY

Tourisms future growth lies within transformation

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Tourism’s future growth lies within transformation, writes Jerry Mabena, CEO of Thebe Tourism Group.

Tourism spending in South Africa has been growing at a steady pace for a number of years, as have our tourist numbers. In 2014, local and international tourists together spent a total of R238 billion in South Africa, contributing 3% to the local and national economy. Each rand of that figure supported local jobs and contributed to socioeconomic development. In fact, about one out of every 25 employed South Africans at present works in the tourism sector, which has grown its contribution to job creation over the past 10 years.

However, the value created by these tourism and related activities has unfortunately not been shared equitably due to the skewed pattern of ownership within the sector. And the experience of exploring this awe-filled country of ours just for the sake of it has been the domain of a few.We need to ask ourselves probing questions about how this came to be, as the situation is not the outcome we have hoped for at the dawn of democracy. Each of us involved in tourism, from private companies and small and micro enterprises, to municipalities, provinces and national government, needs to set out doing more to transform the sector.Transformation remains an imperative, not only because it is right. Transformation makes economic sense. Everybody in the sector, regardless of race, gender or socio-economic status, will benefit from its transformation, as will the rest of the country. Since 2008, tourism added more jobs to the economy than trade, agriculture and manufacturing­—and tourism has the potential grow its contribution, should it transform and become more inclusive.

A transformed tourism sector will contribute more to funding in the form of tax revenues for Government’s social and economic development programmes. It will employ more people at higher wages, and contribute more to the reduction of poverty and inequality. It will create more economic opportunities outside of the country’s urban centres and will reduce the pressure they are under due to the rapid rate of urbanisation.And it will have a greater proportion of black tourists, large numbers of whom are currently not travelling for leisure. These non-travellers are where the future growth of domestic tourism lies. Many of them earn over R5 000 per month in personal income, a recognised threshold for potential travel. Yet only a tiny handful travel for leisure, preferring to spend their income on other lifestyle products and services such as satellite TV, cars and entertainment.For context, in 2014, domestic travel contributed to almost three fifths of total tourism spending, 57% of it was on road transport, accommodation and air fares. Domestic tourism expenditure in 2014 grew by a meagre 7%, just under 1% higher than inflation.

This is respectable, but could and should be higher, if we can get more black South Africans on the roads and in planes, into hotels and other forms of accommodation—if we can get more of them to see their own country.Part of why so few black South Africans with the means to travel for leisure are not doing it, lies in the messaging, which has viewed this market as uniform and which has deployed unfortunate terms such as ‘black diamonds’. This market, in reality, differs significantly in spending habits and interests by age group, geographic location, source of income and sociocultural background. It is not enough to believe that directing marketing initiatives at this group as a whole will translate automatically into increased domestic tourism numbers. It is about understanding the things that matter to this market and how these get to be translated into messaging and packaging.Research by KayaFM provides a more useful disaggregation of this market, whose members it calls Afropolitans. Afropolitanism, according to the research, is a state of mind of Africans who straddle two or more distinct cultures, identities, continents, sets of friends, languages and levels of awareness. The market can be further broken down into the ‘Forerunner’, the ‘Born Affluent’, the ‘Shape Shifters’ and the ‘Kasi Certified’, each of whom differ in outlook, consumption patterns and touch points.

What they do have in common, which is relevant to the travel trade, is that an emotional connection to a brand or place is important. Authenticity and quality matter obviously, but they want to know most of all, is that the story behind the product or service is in line with their values. The research also suggests that among the few who travel, the novelty of the experience and the opportunity for relaxation are among the top reasons for travel, and they rely on word of mouth for insight on where to travel to.This knowledge should change how we speak to this market, as the sector’s current messaging does not get into the niches, nor does it package our products in a way that generates the desired appeal.The first thing to do is to step away from assumptions and stereotypes. A tourism activity that might be thought of as unappealing to a black traveler, like skiing, for instance, might be just what they are after. Recall what the research said about the importance of novelty to this market. Also, related to this, we should communicate and package our products in a way that has the first-time traveler in mind, equipping them with the knowledge to try out something they have never done before without the fear of embarrassing themselves.

We also need to start selling for groups, which is how many Afropolitans travel. Think of the church stokvels, or group of friends from university, or book club that read about a place and are interested in visiting. And we need to consider affordability, which is where domestic tourism can appeal more than far-off destinations.To transform the sector on the supply side, Government and established companies need to find new and innovative ways to support small or emerging black-owned businesses in tourism. Partnerships and other forms of support are key.What small and emerging businesses need isn’t always financial. Sometimes they need access to the kinds of social capital and networks larger companies have built up over the years. Other times the business owner needs guidance and mentorship to improve the quality of what they’re offering. Because, in a sector such as tourism, businesses rise or fall on the quality of the offering.Recognition from industry peers can also instil the confidence a business owner needs to take their operations to the next level. The Thebe Tourism Group’s involvement with the Cape Town Tourism Board’s Development Fund, which supports small, medium and micro enterprises in the tourism sector, is one way we have been involved in this area.

Another important way transformation needs to happen is by ensuring that growth includes rural and historically marginalised communities. To do our part towards this goal, TTG is in the process of finalising agreements with a number of rural communities and partners to develop and manage a few key and strategic iconic attractions in Mpumalanga and the Eastern Cape.These kinds of partnerships combine our experience and expertise, running attractions such as the award-winning Cape Point with the under-utilised assets of rural communities to provide tourism services in areas where they did not previously exist. This has the potential to create new income streams for these communities and to bring the experience of tourism within a geographic and affordable reach in these provinces.Ultimately, the tourism sector has more to gain from transformation than the thoughtfulness, innovation and flexibility transforming demands of us. Having spoken to other industry leaders and players in the sector, I am hopeful that transformation will lead growth in the sector and will filter through—and that the best and the brightest minds in the sector are applying their minds to bring about change.

 

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