B-BBEE Profile of the Travel Sector in SA...B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA 01 CONTENT Report by GRANT THORNTON Objective and Approach About the Tourism B-BBEE

B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICAPrepared on behalf of the Association of Southern African Travel Agents by Grant Thornton

B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA01

CONTENT

www.asata.co.za Report by GRANT THORNTON

Objective and Approach

About the Tourism B-BBEE Sector Codes

Tourism QSE Scorecard

Tourism Large Enterprises Scorecard

B-BBEE Enterprise Categories and Status Levels

Element 1: Ownership

Element 2: Management Control

Elements 3 to 5: Skills, Enterprise & Supplier and Socio-Economic Development

Conclusions and Recommendations

03

04

07

10

14

16

19

22

24

B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA

Prepared on behalf of the Association ofSouthern African Travel Agents

02

ACRONYMS


ASATA Association of Southern African Travel AgentsBBBEE Broad-Based Black Economic EmpowermentBEE Black Economic EmpowermentEME Exempt Micro EnterpriseITC Independent Travel ConsultantQSE Qualifying Small EnterpriseSMME Small, Medium and Micro EnterpriseTMC Travel Management CompanyTOMSA Tourism Marketing South Africa


Objective and approach

= The Association of Southern African Travel Agents (ASATA) commissioned Grant Thornton to create a South African Travel Market Index Report to determine the state and size of South Africa’s travel sector.

= The objective of the study is to create an accurate picture of the travel market in South Africa which can be utilized by ASATA and its members for strategic management.

= This is the first time such a study and in-depth analysis has been undertaken in South Africa and it is envisaged that the resulting data will provide a baseline against which the industry would be able to measure growth and track market changes over time.

= Included in this study is an analysis of the Broad-Based Black Economic Empowerment (B-BBEE) profile of the

travel sector. The results of this analysis are summarized in this report.

= To inform the study, Grant Thornton conducted personal interviews with a selection of companies operating in the travel sector in order to gain an understanding of the industry and the extent of information that is realistically obtainable from industry players.

= A detailed questionnaire was distributed to all ASATA members and a selection of non-members for completion. The Grant Thornton team encouraged participation in the research process and accurate completion of questionnaires.

= In total, the data received from travel companies, Travel Management Companies ("TMCs") and Independent Travel Companies (ITCs) are representative of approximately 70% of the travel industry when measured by turnover.

= Where possible, results have been extrapolated to the entire industry.

= In addition to specific questions around each enterprise's B-BBEE level, black and black female ownership and employee profile, respondents were required to submit copies of their current B-BBEE certificate.

= This data was utilized to develop a comprehensive picture of transformation in the travel sector.

= In total 46 scorecards were received and analysed.

= Combined these 46 scorecards represent all (100%) Large Enterprises, 48% of Qualifying Small Enterprises (QSE) and 2% of Exempt Micro Enterprises (EME) in the sector. This is considered to be statistically relevant at the Large Enterprise and QSE level. As EMEs are generally exempt from B-BBEE scorecard compliance, limited information can be obtained from these certificates and thus higher responses would not be beneficial to the research.

= Where averages have been provided, these are simple averages and have not been weighted to turnover (unless specified otherwise).


03

Objective of the Travel Market Index study

Methodological approach

Measuring B-BBEE in the Travel sector


About the Tourism B-BBEE Sector Codes

= As recognized by the National Department of Tourism, "the tourism sector in South Africa remains characterized by large disparities in access to opportunities and benefits, in particular for black people. The sector still excludes a vast majority of South Africans, and the residual impact of this legacy of inequality, prevents tourism and a tourist-friendly culture from taking root in our country".

= The Tourism Broad-Based Black Economic Empowerment (B-BBEE) Code ("the Code"), is a commitment of government and the private sector to create a vision of inclusive growth for tourism – to make the sector more accessible, relevant and beneficial to all South Africans.

= The gazetting of the Tourism B-BBEE Code means that it is legally binding to all entities in the tourism sector, including:

= Accommodation: hotels, guest houses, resorts and timeshare, game lodges, bed and breakfasts, backpackers, hostels, etc.

= Hospitality and related services: restaurants, attractions, casinos, conference and event venues, professional services, catering, etc.

= Travel and related services: Travel Agents, tour wholesalers, tourist guides, tour operators, car rental companies, coach operators, etc.

The Code defines 3 categories of tourism enterprises, determined by annual revenue: Large (>R45 million pa), QSE (R5 to R45 million pa) and EME (<R5 million pa)


04

Rationale for Tourism B-BBEE Sector Code

Scope of Application

B-BBEE implementation timeline

The Tourism Broad-Based Black Economic Empowerment Sector Code is binding on all entities in the sector, including the travel industry (TMCs and ITCs). After more than 10-years of implementation there should now be greater representation of black people at all levels and facets of the tourism industry.

2003 2005 2007 2009 2013 2015

B-BBEE Act

promulgated

First Generic Codes of Good Practice Issued

Amended Generic Codes of Good Practice Issued

Tourism B-BBEE Charter published

Tourism B-BBEE Sector Code published

Amended TourismB-BBEE Sector Code published


THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY

= Based on annual revenues, the Tourism B-BBEE Sector Code defines 3 categories of tourism enterprises, viz= Exempt Micro Enterprise (EME): total annual revenue of less than R5 million= Qualifying Small Enterprise (QSE): total annual revenue of R5 to R45 million= Large Enterprise: total revenue of more than R45 million

= Each category has different B-BBEE compliance elements, criteria and weightings. There are specific scorecards for QSE and Large enterprises.

= To ensure B-BBEE compliance, all QSE and Large tourism enterprises are required to be verified annually, against the defined QSE or Large Enterprise scorecard.

= EME enterprises are only required to have a sworn affidavit confirming the total annual revenue of R5 million or less and the percentage black ownership of the enterprise. This serves as proof of B-BBEE compliance/ certificate.

= Verification can only be performed by an accredited verification professional/ agency.

= All entities are required to be verified annually and issued certificates, reports or sworn affidavits are only valid for 12 months.

= According to the B-BBEE Act all tourism entities should submit their verification reports, certificates or sworn affidavits to the Tourism B-BBEE Charter Council.

= Based on the overall performance, on either the Large Enterprise or QSE scorecard, the measured entity will receive one of 9 statuses and corresponding B-BBEE recognition level.


05

Categories of tourism enterprises

Verification for B-BBEE compliance

B-BBEE recognition levels

Level 1 ≥ 100 points 135%

Level 2 ≥ 95 but <100 points 125%




Level 6

≥ 70 but <75 points 60%

Level 7

≥ 55 but <70 points 50%

Level 8

≥ 40 but <55 points

10%

Non - compliant

<40 points

0%

Qualification (achieved scorecard score) B-BBEE Recognition LevelB-BBEE Status


Compliance requirements vary by enterprise category: All EME businesses automatically qualify for Level 4, whilst black owned (>50%) EMEs and QSEs automatically qualify for Levels 1 or 2. All other businesses must comply with either the QSE or Large Enterprise Scorecards

= All EMEs automatically qualify for level 4 B-BBEE status (B-BBEE recognition level of 100%).

= An EME which has at least 51% black ownership qualifies for elevation to level 2 B-BBEE (B-BBEE recognition level of 125%).

= An EME which has 100% black ownership qualifies for level 1 B-BBEE (B-BBEE recognition level of 135%).

= An EME is only required to obtain a sworn affidavit on an annual basis confirming the total annual revenue of R5 million or less and the percentage black ownership. This serves as proof of B-BBEE compliance/ certificate.

= All startup enterprises are measured as EMEs in the first year of operations.

= An EME wishing to tender for a contract in the tourism sector with a value greater than R5 million but less than R45 million should submit a QSE scorecard or large scorecard if the value is greater than R45 million.

= A QSE must comply with all elements of the QSE Scorecard and the resulting score will determine the enterprise's B-BBEE status and recognition level.

= A QSE which is 51% black owned will automatically qualify for a Level 2 B-BBEE status (125% recognition level).

= A QSE which is 100% black owned will automatically qualify for a Level 1 B-BBEE status (135% recognition level).

= A QSE with more than 51% black ownership is only required to have an annual sworn affidavit confirming annual revenue between R5 and R45 million, level of black ownership and empowering supplier status.

= Large enterprises are required to comply with all elements of the Large Enterprises Scorecard and the resulting score will determine the enterprise's B-BBEE status and recognition level.


06

Compliance requirements

EME compliance (Annual Revenue <R5 million)

QSE compliance (Annual Revenue R5 to R45 million)

Large Enterprise compliance (Annual Revenue >R45 million)


Tourism QSE Scorecard


07

Ownership

Management Control

Indicator

Voting Rights

Measurement Category & Criteria


Exercisable Voting Rights in the entity in the hands of Black People

Executive Management

Senior, Middle and Junior Management

Bonus Points

Exercisable Voting Rights in the entity in the hands of Black Women

Weighting Points

Weighting Points

4

2

30%

15%

Compliance Targets

Compliance Targets

Economic Interest

Economic Interest in the entity to which Black People are entitled

Economic Interest in the entity to which Black Women are entitled

Economic Interest of any of the following Black Natural Persons in the measured entity:

Ÿ Black Designated GroupsŸ Black Participants in Employee Share

Ownership ProgrammesŸ Black People in Broad-Based Ownership

SchemesŸ Black Participants in Co-operatives

4

2

2

2

3

30%

1%

15%

3%

Realisation Points 8Refer to Annexe

TSC100(E)Net Value

Black Female representation at Executive Management

Black Female representation at Senior, Middle and Junior Management

Number of Black Employees with Disabilities as a percentage of all Employees

Black representation at Executive Management

Black representation at Senior, Middle and Junior Management

5

2

60%

30%

30%

6 60%



08

Skills Development


Skills Development Expenditure on any programme specified in the Learning Programme Matrix for Black People as a percentage of the Leviable Amount

Learnerships, Apprenticeships, and Internships

Bonus Points

Weighting Points

Compliance Targets

Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for Black People in any of the following three tourism sub-sectors as a percentage of Leviable Amount:

Ÿ AccommodationŸ Hospitality and related servicesŸ Travel and related services

Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for Black Females in any of the following three tourism sub-sectors as a percentage of Leviable Amount:


Number of Black People participating in Learnerships, Apprenticeships and Internships paid for by the measured entity as a percentage of total Employees

Number of Black People absorbed by the measured entity and industry entity at the end of the Learnership, Apprenticeship or Internship Programme

10

9

3%

1.5%

6

5

2.5%

100%



09

Enterprise and Supplier Development

Socio-Economic Development


Preferential Procurement

Supplier Development

Bonus Points

Enterprise Development

Weighting Points

Compliance Targets

B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

Annual value of all Qualifying Socio-Economic Development contributions by the measured entity as a percentage of the target

Annual value of all Qualifying Supplier Development contributions made by the measured entity as a percentage of the target

Status as Tourism Marketing South Africa (TOMSA) levy collector

Annual value of all Qualifying Enterprise Development contributions made by the measured entity as a percentage of the target


8

5

7

3

1

10

60%

1% of NPAT

2% of NPAT

Yes

1% of NPAT

30%

Measurement Category & Criteria Weighting Points

Compliance Targets


Tourism Large Enterprise Scorecard


10

Indicator

Voting Rights


Exercisable Voting Rights in the entity in the hands of Black People

Exercisable Voting Rights in the entity in the hands of Black Women

Weighting Points

4

2

30%

15%

Compliance Targets

Economic Interest

Economic Interest in the entity to which Black People are entitled

Economic Interest in the entity to which Black Women are entitled

Economic Interest of any of the following Black Natural Persons in the measured entity:

Ÿ Black Designated GroupsŸ Black Participants in Employee Share

Ownership ProgrammesŸ Black People in Broad-Based Ownership

SchemesŸ Black Participants in Co-operatives

4

2

3

30%

15%

3%

Realisation Points 8Refer to Annexe

TSC100(E)Net Value

Ownership



11

Senior Management

Middle Management

Junior Management

Employees with Disabilities

Bonus Points

1

1

Black Female Employees in Senior Management as a percentage of all Senior Management

Black Female Employees in Middle Management as a percentage of all Middle Management

Black Female Employees in Junior Management as a percentage of all Junior Management

Black Employees in Senior Management as a percentage of all Senior Management

Black Employees in Middle Management as a percentage of all Middle Management

Black Employees in Junior Management as a percentage of all Junior Management

Black Employees with Disabilities as a percentage of all Employees

Number of Black Employees with Disabilities over and above the 2% target for Black Employees with Disabilities, as a percentage of all Employees

2

1

60%

30%

38%

40%

2

1

2

2

75%

80%

2%

1% (over and above 2% target

in 2.6.1 of the Amended Code)

Management Control


Board Participation

Other Executive Management

Weighting Points

Compliance Targets

1

Exercisable Voting Rights of Black Female Board Members as a percentage of all Board Members

Black Executive Directors as a percentage of all Executive Directors

Black Female Executive Directors as a percentage of all Executive Director

Black Female Executive Management as a percentage of all other Executive Management

Exercisable Voting Rights of Black Board Members as a percentage of all Board Members

Black Executive Management as a percentage of all other Executive Management

2

1

2

1

50%

30%

50%

30%

30%

2 60%



12

Skills Development

Socio-Economic Development


Skills Development Expenditure on any programme specified in the Learning Programme Matrix for Black People as a percentage of the Leviable Amount

Learnerships, Apprenticeships, and Internships

Bonus Points

Bonus Points

Weighting Points

Compliance Targets

Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for Black People in any of the following three tourism sub-sectors as a percentage of Leviable Amount:


Annual value of all Qualifying Socio-Economic Development contributions by the measured entity as a percentage of the target

Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for Black People with Disabilities in any of the above three tourism sub-sectors as a percentage of Leviable Amount

Number of Black People participating in Learnerships, Apprenticeships and Internships paid for by the measured entity as a percentage of total Employees

Number of Black Unemployed Learners participating in Learnerships, Apprenticeships and Internships paid for by the measured entity as a percentage of number of total Employees

Number of Black People absorbed by the measured entity and industry at the end of the Learnerships Programme

Status as Tourism Marketing South Africa (TOMSA) levy collector

5

5

3

6%

1% of NPAT

0.3%

8

4

5

3

3.5%

3%

100%

Yes

Measurement Category & Criteria Weighting Points

Compliance Targets



13

Enterprise and Supplier Development


Preferential Procurement

Supplier Development

Enterprise Development

Bonus Points

Weighting Points

Compliance Targets


B-BBEE Procurement Spend from all Empowering Suppliers that are Qualifying Small Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

B-BBEE Procurement Spend from all Exempted Micro Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% Black Owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

B-BBEE Procurement Spend from Empowering Suppliers that are 30% Black Women Owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend

Annual value of all qualifying Supplier Development contributions made by the measured entity as a percentage of the target

Annual value of all qualifying Enterprise Development contributions and Sector Specific contributions made by the measured entity as a percentage of the target

Bonus point for graduation of one or more qualifying Enterprise Development beneficiaries graduating to the Supplier Development level

Bonus point for creating one or more jobs directly as a result of qualifying Supplier Development and Enterprise Development contributions by the measured entity

5

3

4

80%

15%

15%

9

4

10

5

1

1

40%

12%

3% of NPAT

0.5% of NPAT

Yes

Yes



14

Profile of the travel industry

B-BBEE Enterprise Categories and Status LevelsThe travel sector is dominated by EME enterprises, many of which are classified as ITCs. The large enterprises in the sector are generally transformed, with two thirds having a B-BBEE status level of 1 or 2. Irrespective of size, more than 55% of all travel enterprises with a B-BBEE certificate have achieved a B-BBEE status at level 1 or 2.

= Of the 1 740 TMC and ITC branches/ outlets in South Africa:

= 13% fall under the umbrella of an organization with a Large Enterprise scorecard;

= 5% with a QSE scorecard;

= 70% would be classified as an EME; and

= 12% don't have a scorecard. Given the profile of the sector, most of these would probably fall within the EME category.

EMELarge None70%13%

5% QSE

12%

EME 70%

Large 13%

None 12%

QSE 5%



15

B-BBEE Status Levels

= A third of travel enterprises with a certificate have a B-BBEE status of Level 1. More than 50% of enterprises with a certificate are at status levels 1 or 2.

= There are no enterprises in the travel industry that have a B-BBEE certificate that register status levels at 3, 7 or 8. This is understandable given that those enterprises with a poor B-BBEE status are unlikely to be verified, despite the binding nature of the Codes. Similarly, Status Level 3 is not achievable by EMEs, which are the dominant enterprise category in the travel sector.

= The large enterprises in the sector are evenly distributed between status levels 1, 2 and 4.

= A slightly higher percentage of EMEs (57%) are at status level 4 compared to 43% at level 1.

= The majority of QSE's are level 2 enterprises (55%), with 18% at Level 1 and the balance evenly distributed between Levels 4 to 6.

Level 1 32.6%

Level 2 23.9%

Level 4

Level 5

Level 6

39.1%

2.2%

2.2%

Profile of the Travel Industry by B-BBEE Status Levels

Level 4Level 1 Level 239%33%

2% Level 6

24%

2% Level 6

2% Level 5



16

Black Ownership

Element 1: OwnershipAll large enterprises have achieved the minimum target for black and black female ownership. More than 50% of the ownership of QSE and large travel enterprises is in the hands of black people. Black females, own nearly 30% of QSE and large travel businesses

Ownership Profile of Large Enterprises= All large travel enterprises have achieved the minimum black ownership target of 30%.

= 17% of large enterprises are 100% black owned= The average ownership by black individuals in large travel enterprises is 52%

= Similarly, large enterprises in the travel sector have also achieved the minimum black female ownership target of 15%.

= The average level of black female ownership across all large enterprises is 28%= The maximum achieved black female ownership is 55%

30%

17%

9%

30%

0%

52%

100% 100%

91%

Target Average Maximum Minimum Percentagewith 100%

Percentagewith >30%

QSE

QSE

Large

Large

30%

30% 16.77%

9.1%

30%

0%52%

52%

100%

100% 100%

90.9%


Percentagewith >30%



17

Black Female Ownership

Ownership Profile of the industry

Ownership Profile of QSE Enterprises= 91% of QSE travel enterprises have achieved the minimum black ownership target of 30%.

= 9% of QSE enterprises are 100% black owned= The average ownership by black individuals in QSE travel enterprises is 52%

= 82% of QSE enterprises in the travel sector have also achieved the minimum black female ownership target of 15%.

= The average level of black female ownership across all QSE enterprises is 30%= The maximum achieved black female ownership is 100%

= Based on feedback received via completed questionnaires, on average black and black female ownership in the travel industry is:

= 40% black owned= 25% black female owned

= This information is for all TMC/ ITC businesses, irrespective of size or scorecard status

On average, all travel enterprises have 40% black and 25% black female ownership.Large and QSE enterprises generally perform extremely well on the ownership element of the respective scorecards

15%9%

16%

0% 0%

30%28%

100%

55%

100%

82%


Percentagewith >15%

QSE

Industry Black Ownership

Average

QSE

Black

Large

Large

Black Female

15%

40%

15%

25.4%

0%

9.1%

16.1%

0%30%

28%

100%

54.7% 100%

81.8%


Percentagewith >30%

40%Black

25%Black Female

Target



18

Ownership Element: Achieved Scorecard Points

= The average large enterprise achieved an ownership score of 25 out of a maximum of 27 points, with the lowest achieved score of 22 and the highest being full points.

= Similarly, the average QSE achieved 24 out of a possible 26 points, with the lowest achieved score of 21 and the highest being 26.

= Note: small samples as not all B-BBEE certificates received included achieved scores at element level.

Ownership Element : Scorecard Points

Average

Maximum

Minimum

Maximum Possible Score

24 25

26 27

21 22

26 27

QSE Large



19

Management Control: Large Enterprises

Management Element: Achieved Scorecard Points

Element 2: Management Control

Large enterprises have almost achieved the Tourism B-BBEE scorecard target for black women across all levels of management. However, achieving total black participation, particularly at middle and senior management levels, is proving to be more challenging. The proportionately high percentage of black and black female personnel at junior management/ travel consultant level bodes well for the manager pipeline.

= Large enterprises have achieved the board participation target for black people, but are still some way off the black participation levels for other levels of management.

= The largest deficit in black personnel is at senior and middle management levels.

= Generally, large enterprises fair well when it comes to black female participation across all management levels, only falling slightly below target at board and senior management participation levels.

= The challenges faced by large enterprises in achieving black representation across all levels of management is further reflected in the average achieved score for the management control element. At an average of 13 out of a maximum possible points of 21, it is evident that large enterprises still have some way to go to achieve the goals specified in the scorecard

Management Control Element : Large Enterprises

Board Participation

Senior Management


Middle Management

Junior Management

53.7%

35.9%

41.8%

51.5%

64.5%

30.0%

38.0%

40.0%

30.0%

30.0%

29.3%

26.9%

32.8%

38.2%

49.5%

50.0%

60.0%

60.0%

75.0%

80.0%

Average Black People

Average Black Female

Target Black

Target Black Female

Management Control Element: Scorecard Points

Average

Maximum

Minimum


13

17

11

21

Large



20

Management Control: QSE Enterprises

Management Element: Achieved Scorecard Points

Across most management levels, QSE enterprises have almost reached or even exceeded the set targets for black female representation. However, except at travel consultant/ junior management level, the target of 60% black participation in management is yet to be achieved

= QSE enterprises have achieved excellent black and black female representation at junior management/ travel consultant level – achieving percentages that are significantly higher than target.

= Overall, for black female representation, QSE enterprises have achieved or exceeded target except at board and senior management level.

= However, for overall black representation, QSE's are behind target from middle management all the way up to board level.

= As with large enterprises, the challenge in achieving black representation across all levels of management in QSEs is reflected in the average achieved score for the management control element.

= QSEs achieved an average of 12 points out of a maximum potential of 18.

= At least one QSE has managed to achieve maximum points for this element.

Conversely, owner-managed EMEs have a high black representation at senior management level but low black female representation at travel consultant level. Overall, the industry is well represented by black people at junior levels with waning participation at higher levels of management.

Management Control Element : QSE Enterprises

Board Participation

Senior Management


Middle Management

Junior Management

40.0%

41.4%

56.5%

44.6%

76.5%

30.0%

30.0%

30.0%

30.0%

30.0%

22.9%

22.4%

30.4%

40.5%

62.3%

60.0%

60.0%

60.0%

60.0%

60.0%



Target Black

Target Black Female

Management Control Element: Scorecard Points

Average

Maximum

Minimum


12

18

8

18

QSE



21

Management Control: EMEs

Management Control: All Enterprises

= The racial profile of EMEs is almost the reverse of that of QSEs and large enterprises – with a high proportion of black people and black females in senior management positions. This is attributed to the dominance of owner-managers across these small enterprises and shows the rising number of black people in these roles.

= The low representation of black females at junior management/ travel consultant level in EMEs is an area of concern.

= The relatively low level of black representation at board level is attributable to the small size of most of these businesses, many with very lean or no board structures.

= Overall, the travel industry has excellent representation of black people and black females at junior management/ travel consultant level.

= But this representation wanes further up the management ladder, with senior management being the level in most need of additional black and black female personnel.

= This data refers to all travel enterprises, with our without a scorecard.

Management Control : EME Enterprises

Management Control: All Enterprises

Board Participation

Senior Management


Middle Management

Junior Management



39.0%

66.7%

50.0%

54.5%

56.5%

22.0%

60.0%

0.0%

45.5%

20.4%

Board Participation

Senior Management


Middle Management

Junior Management



41.5%

38.0%

44.2%

50.6%

63.8%

23.9%

27.0%

30.5%

38.4%

44.1%



22

Element 3: Skills Development Element: Achieved Scorecard Points

Element 4: Enterprise and Supplier Development Element: Achieved Scorecard Points

Elements 3 to 5: Skills, Enterprise & Supplier and Socio-Economic DevelopmentSkills development is an area of underperformance at both QSE and large enterprises. The wider participation of the travel industry in the TOMSA levy collection scheme would assist in generating additional scorecard points.

= Skills development is another area of both the QSE and Large enterprise scorecards where the travel industry can make improvements.

= The average QSE achieved a score of 18 out of 30, whilst the average large enterprise only achieved 17 out of 25 points.

= Improving skills development initiatives aimed specifically at black personnel should assist in further developing the much needed pipeline of black senior managers.

= With an average score of 27 out of a maximum of 30 points, QSE travel enterprises are generally performing well in this element.

= Large enterprises have room to improve the achieved average score of 34 out of 42 points, but overall performance is good for this element.

Skills Development Element: Scorecard Points

Enterprise and Supplier Development Element: Scorecard Points

Average

Maximum

Minimum


18 17

30 22

10 10

30 25

QSE Large

Average

Maximum

Minimum


27 34

38 39

21 28

30 42

QSE Large



23

Element 5: Socio-Economic Development Element: Achieved Scorecard Points

= Both QSE and large enterprises are performing well in this element with an average of 8 and 5 points respectively.

= Becoming a TOMSA levy collector is an easy way for the travel industry to collect an additional 3 points for this element.

Socio-Economic Development Element: Scorecard Points

Average

Maximum

Minimum


7 5

10

5

8

4

10 8

QSE Large



24

Conclusion

Recommendations

Conclusion and Recommendations

= Travel enterprises have, in the main, achieved excellent scores on the Tourism B-BBEE scorecards.

= As this is the first time comprehensive research on the B-BBEE profile of the travel industry has been undertaken, there is no benchmark against which the transformation of the industry can be measured. However, based on anecdotal evidence, it is safe to say that the travel industry has moved from being a "white owned and managed sector" to one that has made significant strides to achieve meaningful transformation across all levels within businesses and across all business sizes.

= However, although travel enterprises have performed well on the Tourism B-BBEE scorecards, the industry is not necessarily reflective of the racial demographics of the country. Further transformation, beyond that specified in the scorecards, would be required to achieve this.

= The dominance of EMEs in the sector are indicative of the important role the travel industry plays in creating and supporting small and micro businesses, more and more of which are black and/or female owned.

= Clearly defined definitions of turnover and revenue need to be included in the Tourism B-BBEE Sector Codes. Discussions with verification agencies confirm confusion and different definitions of what is considered to be turnover and revenue for a travel agency. This is an important consideration as it defines the applicable scorecard for travel businesses.

= The Tourism Charter Council should be capacitated to execute its mandate of collecting and monitoring all B-BBEE certificates in the tourism sector. All scorecards should be reviewed and analysed on an annual basis so that progress/ changes can be regularly monitored.

= A concerted effort is required by all players to continue to develop, promote and source black people into senior management roles in the industry.

= Although a difficult scorecard element against which to achieve maximum points, the travel industry should drive skills development for black employees – especially focused at developing the next generation of management for the industry.

= The travel industry should be encouraged to participate in the TOMSA levy collection scheme – in this way generating much needed scorecard points and contributing to tourism marketing for the country.

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Documents

B-BBEE Profile of the Travel Sector in SA...B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA 01 CONTENT Report by GRANT THORNTON Objective and Approach About the Tourism B-BBEE