It’s time to take tourism seriously
There is great potential for the tourism industry to boost South Africa’s economy, and help alleviate the high levels of unemployment. But for some reason, tourism as an industry is often overlooked as a serious economic sector. Gillian Saunders, who was Special Adviser to former Tourism Minister Derek Hanekom between April 2018 and May 2019, shares her thoughts.
South Africa’s unemployment rate hit 29% in the second quarter of 2019, an increase of 1.4 percentage points compared with the first quarter. The number of unemployed persons in the country has increased by 455 000 to 6.7m over the same period. This is according to the results of the Quarterly Labour Force Survey, released by Stats SA on July 31.
Despite this, tourism as a sector is often overlooked as being key to transforming South Africa’s economy. “Tourism is often misunderstood and underrated, both as an intrinsic sector with its own potential and as a lever for economic growth,” says Gillian Saunders, Tourism and Hospitality Adviser. She says this is because of the multi-faceted nature of tourism, which makes it harder to appreciate and quantify as a sector.
Saunders says it is worth keeping in mind that tourism is an export sector. “Tourism’s greatest areas of potential growth are in exports, and in bringing in more, higher spending overseas and African air tourists with their forex spending. Tourism imports high spending customers,” she says.
Tourism is also an ‘apex’ sector, Saunders says, with a long and deep supply chain. This allows it to stimulate economic activity in other sectors, such as manufacturing and agriculture. “Think of buses, cars, linen and towels, crockery and cutlery etc. Just imagine how many chickens and eggs Sun City consumes in a year. If you want to stimulate demand in manufacturing and agriculture, and other industries such as finance, marketing, retail, or logistics, tourism is your industry.”
According to Saunders, almost one additional rand of value is added to the rest of the economy for each rand of tourism direct spend. And for every direct job supported in tourism, an additional 1.1 jobs are supported in other sectors of the economy.
She also points out that, not only does tourism bring in foreign exchange and stimulate other sectors, but it is an employment-intense industry. She says while the industry must embrace the digital and shared economies, it will remain a people-intensive industry and a high employer. “Tourism employs people across the skill levels and, even better, across the country, often in rural areas.” Tourism is also a high employer of women and young people, at 70% and 60% of tourism employment respectively falling into these two demographics.
The tourism industry also supports high levels of indirect employment. Saunders says: “In total, 1.53 million jobs are supported by tourism currently; some 726 000 direct and more than half, at around 800 000, through the multiplier effect.”
Saunders says if South Africa reaches the target of 21 million arrivals in 2030, tourism will support in the order of two million more jobs in total throughout the economy.
“Tourism is an amazing industry. It is one in which you can still enter unskilled at the bottom, and make it to the top. There are many stories of cleaners, rangers, bar staff, and the like making it to lodge owner, hotel general manager, restaurant owner etc. Motivated people can make it to the top with no formal qualifications,” she concluded.
Gillian Saunders is an Independent Tourism and Hospitality Adviser. Between April 2018 and May 2019 she was Special Adviser to the then Tourism Minister, Derek Hanekom. Prior to that, until mid-2018 she was Deputy CEO of Audit Tax and Advisory Firm, Grant Thornton in Johannesburg, and head of their Advisory Services in South Africa. Saunders’ client-facing expertise while at Grant Thornton was consulting to the hospitality, tourism and leisure industries and she has a long track record of more than 30 years in her speciality area. In 2012 she was appointed Global Sector Leader, Hotels and Tourism for Grant Thornton and led a team of experts in various fields related to the industry from over 25 countries. Saunders has consulted extensively in all aspects of these industries for the public and private sectors throughout Africa. Prior to consulting, she worked in the industry in Europe and South Africa, with stints with EUREST (a contract catering subsidiary of Nestle and Wagon Lits), in France, and with Sheraton in Germany and Switzerland, before joining the Southern Sun Group in South Africa in 1982. She is the author of a number of articles and a regular commentator in the media on many issues related to Tourism and Hospitality. She is a member (and previous chairperson) of the board of the University of Johannesburg’s School of Tourism and Hospitality and is passionate about education and education in the Hospitality and Tourism sector. Saunders was recently honoured with a President’s Award from the Chef’s Association of South Africa for making an incredible, far-reaching impact on South Africa’s culinary, hospitality and tourism industries over more than 25 years.