World Report

The tourism industry has grown steadily since the end of apartheid and there are hopes of setting a new record this year

Wildlife is a major tourist attraction.

ourism has been identified by the government as one of South Africa’s leading potential growth sectors. The industry’s contribution to gross domestic product is fast closing on R100 billion (£8 billion) and it is a major employer, providing direct employment for 1.2 million people. Over the last two years it has created 36,000 new jobs.

Fewer than three million people visited South Africa prior to the first democratic elections in 1994. Since then the number has more than doubled and is continuing to rise. Last year there were 6.7 million foreign tourists, the highest number ever, with around 400,000 coming from the UK. This year it is hoped to break through the seven-million barrier.

Domestic tourism is also being encouraged. “For historical-political reasons, millions of people here have never seen themselves as holidaymakers,” says Marthinus van Schalkwyk, Minister of Environmental Affairs and Tourism. “Our estimation is that there is a group of more than six million people who can now afford holidays for us to appeal to.”
More than R20 million (£1.6 million) is being invested in the domestic market this year, three times the amount invested in 2004. Visitors are also flocking in from other parts of Africa. Of last year’s 6.7 million, 4.6 million came from other African countries – an increase of 4.2 percent over 2003.

Increased black participation in the industry could unlock its potential

The recently launched Black Economic Empowerment (BEE) Tourism Charter envisages almost a third of South Africa's tourism industry in black hands by 2014. Officials emphasise that the charter is as much about competitiveness as empowerment, and say that increased participation will unlock the industry’s potential and ensure its long-term sustainability.

Montecasino, South Africa’s largest casino, owned by Tsogo Sun Gaming.

A grading system is being introduced to ensure that standards of quality are maintained. “Black empowerment is not about the lowering of standards,” says Mr Van Schalkwyk. “It is about giving people access and creating new opportunities and partnerships between black and white, but it can only work if it provides the same quality of service.”

The hotels owned and managed by Tsogo Sun Holdings, South Africa's largest black empowerment hotel and gaming company, range from five-star to one-star, but dedication to quality service is consistent throughout.

Marthinus van Schalkwyk
Minister of Environmental Affairs and Tourism

“Empowerment is about access, new opportunities and partnerships”

Ron Stringfellow
CEO of Tsogo Sun Holdings

“We pride ourselves on a consistent delivery of service”

The group is 51 percent owned by Tsogo Sun Investments and 49 percent by the London-based brewing giant SABMiller. The hotel side of the business is run by Southern Sun Hotels, the leading hotel group in the southern hemisphere and a central player in the hospitality industry. The company operates hotels under the leading InterContinental, Crowne Plaza and Holiday Inn Brands.

“Unlike some of our competitors who only focus on one segment, we cover the entire sector,” says Ron Stringfellow, Tsogo Sun’s Chief Executive Officer. “We have got different hotels and different brands throughout the country, but we pride ourselves on a consistent delivery of excellent services.”

A lot of money is spent on refurbishing. “We try to ensure that if you want to stay in a three-star hotel we exceed your expectations,” Mr Stringfellow explains. “We like to provide something which gives people consistency and good value for money, and we seem to be able to do that considering our occupancy rates and the amount of repeat business we get.”

The five casinos run by Tsogo Sun Gaming include Montecasino, the largest in the country. “The casinos are very big business and in fact the gaming part of our business is now even bigger than the hotel part,” says Mr Stringfellow.

The appeal of the casinos has been extended by turning them into entertainment centres for the whole family. “We get 18 million people a year through our five casinos and only 60 percent go into the casino itself. That’s about seven million people who use our facilities but don’t enter the casino. People come here for a lot of things other than gambling.”

Tsogo Sun holds such a strong position in the South African tourism industry that it feels there is no further room to expand its South African portfolio. Already present in seven African countries, it is still expanding on the continent and in the Middle East.

“We are expanding the hotel side quite aggressively. In some cases they are management contracts and in other instances they are investments, we are looking at where we might expand the casino business elsewhere.”