M van Schalkwyk at visit to construction site of Sowetan hotel

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,
which 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 Gross Domestic Products (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 South African 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 Black Economic Empowerment 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 SMMEs 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 Department of Trade and
Industry (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 three million if micro and survivalist businesses are also
included
* Global Entrepreneurship Monitor, South African Report 2005

Enquiries:
Riaan Aucamp
Cell: 083 778 9923

Issued by: Department of Environmental Affairs and Tourism
11 March 2006