How can small travel and tourism businesses become big businesses? This was a key question posed during a panel discussion at WTM Africa last week.
Experts tackling the issue included: Septi Bukula, Founder and Director of Seeza Tourism Growth Network; Tshepo Matlou, Business Coach, Sobona; and Velma Corcoran, Regional Lead, Middle East Africa at Airbnb. Moderator, Mandisa Magwaxaza, Founder and Owner of Molo Mhambi Relations and Womxn Xplore led the discussion.
Bukula explained that a small business, as per formal government guidelines, was defined by size of revenue, number of people employed, and gross assets. He did note that there were companies that did not employ a lot of people but might be high revenue, and whilst government did place emphasis on employment, this was not overlooked.
“In terms of funding opportunities, all these factors are taken into account. A bank would prioritise asset base and revenue, whilst venture capitalists are looking at future growth – a unicorn in the making,” Bukula said.
Matlou added, “A healthy definition of big business means how we operate in a community, how we add value in terms of the supply chain, and the sustainability of the business. We need to build value within our communities. Enterprise development in townships is successful because they add value to others, for example, a guest house can benefit tours and restaurants.”
Informal sector often overlooked
Building on from the value chain theory, Corcoran raised the point that of the 11 million jobs by 2030 – as laid out by the National Development Plan – it was estimated that nine million of those jobs were expected from SMMEs and, within that, two million would be from the informal sector which was often overlooked.
“Government tries to formalise rather than enable,” said Corcoran.
Her second key point highlighted private/public partnerships, such as that of Airbnb in the Waterberg. Here Airbnb have worked with the local municipality to develop potential tourism experiences through the Airbnb Entrepreneurship Academy.
Other partners were brought on board in order to support and enable entrepreneurs within the region. “Our digital campaign shines a spotlight on both the area and the hosts to increase demand. We would love to roll out this model in other areas. What made it work was the willingness of parties to come together for the betterment of the area, so solutions were found.”
Move away from traditional funding
Magwaxaza put the challenge forward of how the sector could move away from traditional funding, and asked how government could be more creative and efficient in the support of small businesses.
Bukula acknowledged that information was scattered and inefficient and that people did not take advantage of available support because they didn’t know how to find it. He raised the point that banks also had programmes and were very supportive of SMMEs.
Matlou encouraged individual support of potential through access, skills development and mentorship. “We need to have affordable technologies online and private/public initiatives to provide other tools beyond training. We need to give people the skills to run a business and provide the marketplace,” he said.
All agreed that nothing would work without the drive of the entrepreneur as the key ingredient to develop businesses within tourism.
