Support for SMMEs Key
to Tourism ASGISA Success: Government Commits
R185m For Next 3 Years
Statement by the Office of Marthinus van Schalkwyk
Minister of Environmental Affairs and Tourism,
on 11 April 2006
TUESDAY, 11 APRIL 2006: “Tourism
in South Africa is as much about Vilakazi Street,
Kliptown, and Meadowlands as it is about beaches,
mountains and the Big Five. The key to our long
term tourism success is to ensure that visitors
have world-class experiences of all that our country
has to offer – from natural beauty, to unique
history, and some of the most inspirational and
vibrant culture in the world.” This was the observation
of Marthinus van Schalkwyk, Minister of Environmental
Affairs and Tourism, speaking during a visit to
the construction site of the new R20 million Freedom
Square Hotel being built in Soweto.
Admiring the progress being
made on the planned 48-room, four-star tourism
landmark the Minister said: “It is quality infrastructure
like this new hotel, that will help to open the
floodgates, allowing us to realise the full potential
of our tourism sector. Two recent studies on tourism
in Soweto have highlighted our challenges – showing
that tourists arrive in large numbers, but that
these arrivals often do not translate into longer
stays or major spending in these areas. We need
to diversify our tourism products – offering Bed
and Breakfast experiences, backpacker accommodation,
and high-end hotel options. We also need such
developments to add new dimensions to our tourism
offering – bringing business tourism, for instance,
to places in which leisure tourism has been the
major traditional draw card.”
Speaking to tourism operators
from across Gauteng later in the morning at an
Imbizo at Uncle Tom’s Hall in Soweto, the Minister
addressed the importance of ensuring the success
of smaller tourism entrepreneurs: “In February
tourism was placed at the centre of our new Accelerated
and Shared Growth Initiative (ASGISA). We know
that it is our small and medium sized tourism
businesses that hold the key to translating the
potential of tourism into jobs and growth. We
also know, however, that small businesses in tourism
face many of the same challenges that are faced
by entrepreneurs in other sectors: access to finance,
access to already established markets, often complex
regulations and legal requirements, and a real
need for improved skills and training.”
The Minister added that it was
for this reason that the Department had chosen
to concentrate on tourism SMMEs during the National
Imbizo Focus Week – to offer smaller tourism entrepreneurs
the chance to make their voices heard, and to
share with them the programmes and projects of
Government designed to support and grow their
enterprises. A 2004 review compiled by the National
Treasury estimated that there are up to 650 000
small and medium enterprises in South Africa (1),
and that these businesses together contribute
about 50% of total GDP and account for more than
60% of total employment in the country. “What
we do not know with any certainty,” said the Minister,
“Is how many of these SMMEs are part of our tourism
sector – and it is information like this that
will be the focus of work now being done by our
Department in partnership with SA Tourism, the
Tourism Business Council (TBCSA) and the Grading
Council – building a reliable and accurate database
of tourism products in South Africa.”
“Research in 2005 has shown
that the likelihood of a new company surviving
in South Africa is often lower than in any of
the 35 countries surveyed (2),” said the Minister.
“To turn that around, to ensure our plans for
accelerated and shared growth succeed, we must
build and support our tourism SMMEs. This is why
our Department has partnered with organisations
like the Business Trust in establishing initiatives
like the Tourism Enterprise Programme (TEP) –
to create links and working relationships between
small firms and established businesses. Since
2004 our Department has contributed about R32
million to the TEP, which in six years has assisted
almost 3100 SMMEs to grow their revenues by more
than R2,1 billion, creating more than 30 500 jobs.”
“I am pleased to confirm that
we will, over the next three years, be investing
another R185 million in the TEP,” said the Minister,
“Which will be boosted by more than R41 million
from the Business Trust. This funding will be
used to greatly expand the TEP services to small
businesses, which will now also include training
and mentorship; strategic advice and support to
realise the new Tourism BEE Charter; consultation
on opportunities for growth like the 2010 World
Cup; marketing and product development; as well
as for building tourism awareness. The initial
target for these next three years is in excess
of R1,8 billion in transactions facilitated, and
more than 2000 enterprises assisted.”
The Minister also spoke about
a range of other initiatives undertaken by the
Department in support of tourism SMME’s including
the establishment of a business training package
for entrepreneurs, the development of a tourism
SMME funding and support handbook, and the opening
up of dti incentives to tourism entrepreneurs.
Presenters from the TEP, the Small Enterprise
Development Agency (SEDA), The Enterprise Organisation
(TEO), the Grading Council (TGCSA), and Gauteng
Enterprise Propeller also addressed the Imbizo.
Up to 3 million if micro and
survivalist businesses are also included
Global Entrepreneurship Monitor, South African
Report 2005
