SMEs a major contributor to travel and tourism sector

According to Gerrie van Biljon, executive director at Business Partners Limited, small and medium enterprises (SMEs) in the South African tourism sector have a vital role to play in growing our economy, and can also be credited for being a key driver in the tourism sector.

Van Biljon says that recent tourism statistics are an encouraging sign for SMEs and entrepreneurs wanting to enter the South African tourism market. He says that the Stats SA July 2012 tourism accommodation report revealed a year-on-year increase of 8.8% for the total income for the accommodation industry in July 2012. A report by South Africa Tourism also showed a 15% year-on-year increase for the total number of tourists entering the country in April 2012.

Avenues are opening up

"The tourism sector continues to grow, even as other sectors and industries are suffering, which opens up many avenues for entrepreneurs who are interested in entering the market. Many entrepreneurs have seen a gap in the sector and seized the opportunities offered and as a result have developed into successful SMEs.

"At the end of our fiscal year, 31 March 2012,10.7% of the businesses on our books were involved in the travel and tourism sector. This figure highlights the opportunities that are available to entrepreneurs and small businesses. These types of business include travel agencies, tour operators, guest houses and even a shark cage diving company."

Van Biljon adds that SMEs operating in the travel and tourism sector are also responsible for creating thousands of jobs. "The South Africa Travel & Tourism Economic Impact 2012 report by the World Travel & Tourism Council, revealed 9.0% of South Africa's total employment, amounting to 1 188 000 jobs, were generated by travel and tourism, including jobs indirectly supported by the industry. It was also reported that this figure is expected to rise by 3.2 % in 2012 to 1 226 000 jobs."

Decline in domestic tourism

He says it is therefore critical for SMEs in the travel and tourism sector to adapt their offerings according to what the market is doing in order to ensure their business grows. "SMEs currently operating in the tourism sector need to pay close attention to their local leisure and business travellers, as recent research by South African Tourism showed the number of people taking domestic trips has started to decline and that these travellers are both travelling less each year, as well as spending less on each trip.

"For this reason, SMEs in the industry need to diversify their product offering and adapt their strategies in order to attract this local clientèle and ultimately continue to grow their business and employee numbers." However, Van Biljon warns that while the travel and tourism sector offers many opportunities, it is key to thoroughly research the market they are entering before making a decision as the travel and tourism industry has a lot of competition.