Towards a development strategy for small businesses in the tourism industry of the Southern Cape

Abstract

This study had as its origin the questioning by the researcher of the statements made by local and national politicians that the increase in tourist numbers visiting the Southern Cape was resulting in the creation of many new business ventures and work opportunities. This result was, however, not visible. In an attempt to find an answer to the above problem no pertinent information regarding the tourism industry, or evidence that local or regional government was actually involved in planning for the development of such an eventuality, could be found. In 1996 the National Government identified tourism as a major industry sector which could contribute towards economic development. The industry was expected to make a substantial contribution to the alleviation of poverty and to black economic empowerment. The government issued a White Paper on the Development and Promotion of Tourism in South Africa (1996) in order to produce key policy foundations for the development of the tourism industry in South Africa. Notwithstanding the fact that the central government had, since 1996, implemented various incentive schemes aimed at the tourism industry in general and towards small, medium and micro enterprises (SMME's) that operate in the tourism sector specifically, evidence of these incentive schemes reaching grass-root potential entrepreneurs has not been apparent. Furthermore, although purported to spread the economic benefits equitably among all members of the population, the local previously disadvantaged community did not seem to be benefiting from these policies at all. The above perceptions have, in turn, led to a number of questions listed and noted in Chapter one, and culminated in the research problem that was identified as follows: Can a strategy be formulated to stimulate SMME development and concurrent job creation among SMME's operating in the tourism sector of the Southern Cape and can such a strategy be depicted within a framework of a development model? The aim of the study was, therefore, to find a practical solution to the developmental requirements of tourism-related SMME's in order to stimulate job creation. The study was conducted in three sections: Section 1 consisted of an extensive literature survey in which it was determined that: <ul> <li>Tourism-related SMME's could make a positive contribution to local economic development.</li> <li>Although operating under conditions of globalisation, SMME's still had a future if they followed international best practices.</li> <li>Certain practices were considered international best practices.</li> <li>In order for SMME's to be successful, it becomes necessary to plan for the growth.</li> <li>There is a definitive role to be played by Government in this planning exercise.</li> <li>Although much work has already been done in the field of SMME development, very little has been done that addressed the tourism industry.</li></ul> Section 2 comprised an empirical study designed to test the opinions of tourism-related SMME's operating in the Southern Cape region. Factors which were considered to be essential to stimulate the growth of job opportunities were identified and compared with the theoretical requirements established in the previous section. Finally, Section 3 combined the findings of the previous two sections in an attempt to construct a framework depicting a model and strategy for the development of SMME's operating in the tourism sector of the Southern Cape.