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

Transcription

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

2 01 B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA CONTENT B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA 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 Prepared on behalf of the Association of Southern African Travel Agents

3 02 B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA ACRONYMS ASATA BBBEE BEE EME ITC QSE SMME TMC TOMSA Association of Southern African Travel Agents Broad-Based Black Economic Empowerment Black Economic Empowerment Exempt Micro Enterprise Independent Travel Consultant Qualifying Small Enterprise Small, Medium and Micro Enterprise Travel Management Company Tourism Marketing South Africa

4 03 B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA Objective and approach Objective of the Travel Market Index study = 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. Methodological approach = 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. Measuring B-BBEE in the Travel sector = 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).

5 04 B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA About the Tourism B-BBEE Sector Codes 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. Rationale for Tourism B-BBEE Sector Code = 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. Scope of Application = 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. B-BBEE implementation timeline 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 Tourism B-BBEE Sector Code published 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)

6 05 Categories of tourism enterprises = 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. Verification for B-BBEE compliance = 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. B-BBEE recognition levels = 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. B-BBEE Status Qualification (achieved scorecard score) B-BBEE Recognition Level Level points 135% Level 2 95 but <100 points 125% Level 3 90 but <95 points 110% Level 4 80 but <90 points 100% Level 5 75 but <80 points 80% 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%

7 06 Compliance requirements 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 EME compliance (Annual Revenue <R5 million) = 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. QSE compliance (Annual Revenue R5 to 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 Enterprise compliance (Annual Revenue >R45 million) = 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.

8 07 Tourism QSE Scorecard Ownership Indicator Measurement Category & Criteria Weighting Points Compliance Targets 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 % Economic Interest in the entity to which Black People are entitled 4 Economic Interest in the entity to which Black Women are entitled 2 15% Economic Interest Economic Interest of any of the following Black Natural Persons in the measured entity: Ÿ Black Designated Groups Ÿ Black Participants in Employee Share Ownership Programmes Ÿ Black People in Broad-Based Ownership Schemes Ÿ Black Participants in Co-operatives 3 3% Realisation Points Net Value 8 Refer to Annexe TSC100(E) Management Control Executive Management Measurement Category & Criteria Weighting Points Compliance Targets Black representation at Executive Management 5 60% Black Female representation at Executive Management 2 Senior, Middle and Junior Management Black representation at Senior, Middle and Junior Management 6 60% Black Female representation at Senior, Middle and Junior Management 2 Bonus Points Number of Black Employees with Disabilities as a percentage of all Employees 2 1%

9 08 Skills Development Measurement Category & Criteria Weighting Points Skills Development Expenditure on any programme specified in the Learning Programme Matrix for Black People as a percentage of the Leviable Amount 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: 10 3% Ÿ Ÿ Ÿ Accommodation Hospitality and related services 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: 9 1.5% Ÿ Ÿ Ÿ Accommodation Hospitality and related services Travel and related services Learnerships, Apprenticeships, and Internships Number of Black People participating in Learnerships, Apprenticeships and Internships paid for by the measured entity as a percentage of total Employees 6 2.5% Bonus Points Number of Black People absorbed by the measured entity and industry entity at the end of the Learnership, Apprenticeship or Internship Programme 5 100%

10 09 Enterprise and Supplier Development Preferential Procurement Measurement Category & Criteria 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 8 60% B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend 10 Supplier Development Annual value of all Qualifying Supplier Development contributions made by the measured entity as a percentage of the target 7 2% of NPAT Enterprise Development Annual value of all Qualifying Enterprise Development contributions made by the measured entity as a percentage of the target 1 1% of NPAT Socio-Economic Development Measurement Category & Criteria Annual value of all Qualifying Socio-Economic Development contributions by the measured entity as a percentage of the target Weighting Points 5 Compliance Targets 1% of NPAT Bonus Points Status as Tourism Marketing South Africa (TOMSA) levy collector 3 Yes

11 10 Tourism Large Enterprise Scorecard Ownership Indicator Measurement Category & Criteria Weighting Points Compliance Targets 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 % Economic Interest in the entity to which Black People are entitled 4 Economic Interest in the entity to which Black Women are entitled 2 15% Economic Interest Economic Interest of any of the following Black Natural Persons in the measured entity: Ÿ Black Designated Groups Ÿ Black Participants in Employee Share Ownership Programmes Ÿ Black People in Broad-Based Ownership Schemes Ÿ Black Participants in Co-operatives 3 3% Realisation Points Net Value 8 Refer to Annexe TSC100(E)

12 11 Management Control Board Participation Measurement Category & Criteria Exercisable Voting Rights of Black Board Members as a percentage of all Board Members 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 Other Executive Management Weighting Points Compliance Targets 50% 50% Black Executive Management as a percentage of all other Executive Management Black Female Executive Management as a percentage of all other Executive Management 2 60% 1 Senior Management Black Employees in Senior Management as a percentage of all Senior Management Black Female Employees in Senior Management as a percentage of all Senior Management Middle Management Black Employees in Middle Management as a percentage of all Middle Management Black Female Employees in Middle Management as a percentage of all Middle Management Junior Management Black Employees in Junior Management as a percentage of all Junior Management Black Female Employees in Junior Management as a percentage of all Junior Management Employees with Disabilities % 75% 38% 80% 40% Black Employees with Disabilities as a percentage of all Employees 2 2% Bonus Points 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% (over and above 2% target in of the Amended Code)

13 12 Skills Development Measurement Category & Criteria Weighting Points Skills Development Expenditure on any programme specified in the Learning Programme Matrix for Black People as a percentage of the Leviable Amount 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: 5 6% Ÿ Ÿ Ÿ Accommodation Hospitality and related services Travel and related services 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 3 0.3% Learnerships, Apprenticeships, and Internships 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 % 3% Bonus Points Number of Black People absorbed by the measured entity and industry at the end of the Learnerships Programme 5 100% Socio-Economic Development Measurement Category & Criteria Annual value of all Qualifying Socio-Economic Development contributions by the measured entity as a percentage of the target Weighting Points 5 Compliance Targets 1% of NPAT Bonus Points Status as Tourism Marketing South Africa (TOMSA) levy collector 3 Yes

14 13 Enterprise and Supplier Development Preferential Procurement Measurement Category & Criteria 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 5 80% 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 3 15% 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 4 15% 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 9 40% B-BBEE Procurement Spend from Empowering Suppliers that are Black Women Owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend Supplier Development 4 12% Annual value of all qualifying Supplier Development contributions made by the measured entity as a percentage of the target 10 3% of NPAT Enterprise Development Annual value of all qualifying Enterprise Development contributions and Sector Specific contributions made by the measured entity as a percentage of the target Bonus Points 5 0.5% of NPAT 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 1 1 Yes Yes

15 14 B-BBEE Enterprise Categories and Status Levels The 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. Profile of the travel industry = Of the 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. 70% EME 13% Large 12% None 5% QSE EME 70% Large 13% None 12% QSE 5%

16 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. Profile of the Travel Industry by B-BBEE Status Levels 39% Level 4 33% 24% Level 1 Level 2 2% Level 6 2% Level 5 Level % Level % Level 4 Level 5 Level % 2.2% 2.2%

17 16 Element 1: Ownership All 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 of QSE and large travel businesses Black Ownership Ownership Profile of Large Enterprises = All large travel enterprises have achieved the minimum black ownership target of. = 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% 100% 100% 91% 52% 17% 0% 9% Target Maximum Minimum Percentage with 100% Percentage with > QSE Large QSE Large Target Maximum Minimum 52% 100% 9.1% 52% 100% 16.77% 100% 0% Percentage with 100% Percentage with > 90.9%

18 17 Black Female Ownership Ownership Profile of QSE Enterprises = 91% of QSE travel enterprises have achieved the minimum black ownership target of. = 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 = The maximum achieved black female ownership is 100% 100% 100% 82% 55% 15% 28% 16% 9% 0% 0% Target Maximum Minimum Percentage with 100% Percentage with >15% QSE Large QSE Large Target Maximum Minimum 15% 15% 28% 100% 0% Percentage with 100% 9.1% Percentage with > 81.8% 54.7% 16.1% 0% 100% 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 Ownership Profile of the industry = 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 Industry Black Ownership Black Black Female Target 40% 40% Black 25.4% 25% Black Female

19 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 Maximum Minimum Maximum Possible Score QSE Large

20 19 Element 2: Management Control Management Control: Large Enterprises 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. Management Control Element : Large Enterprises Black People Black Female Target Black Target Black Female Board Participation 53.7% 29.3% 50.0% 30.0% Other Executive Management 41.8% 32.8% 60.0% 30.0% Senior Management 35.9% 26.9% 60.0% 30.0% Middle Management 51.5% 38.2% 75.0% 38.0% Junior Management 64.5% 49.5% 80.0% 40.0% Management Element: Achieved Scorecard Points = 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: Scorecard Points Large Maximum Minimum Maximum Possible Score

21 20 Management Control: QSE Enterprises 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. Management Control Element : QSE Enterprises Black People Black Female Target Black Target Black Female Board Participation 40.0% 22.9% 60.0% 30.0% Other Executive Management 56.5% 30.4% 60.0% 30.0% Senior Management 41.4% 22.4% 60.0% 30.0% Middle Management 44.6% 40.5% 60.0% 30.0% Junior Management 76.5% 62.3% 60.0% 30.0% Management Element: Achieved Scorecard Points = 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. Management Control Element: Scorecard Points QSE Maximum Minimum Maximum Possible Score 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.

22 21 Management Control: EMEs = 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 ownermanagers 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. Management Control : EME Enterprises Board Participation Other Executive Management Senior Management Middle Management Junior Management Black People 39.0% 50.0% 66.7% 54.5% 56.5% Black Female 22.0% 0.0% 60.0% 45.5% 20.4% Management Control: All Enterprises = 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: All Enterprises Board Participation Other Executive Management Senior Management Middle Management Junior Management Black People 41.5% 44.2% 38.0% 50.6% 63.8% Black Female 23.9% 30.5% 27.0% 38.4% 44.1%

23 22 Elements 3 to 5: Skills, Enterprise & Supplier and Socio-Economic Development Skills 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. Element 3: Skills Development Element: Achieved 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. Skills Development Element: Scorecard Points Maximum Minimum Maximum Possible Score QSE Large Element 4: Enterprise and Supplier Development Element: Achieved Scorecard Points = 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. Enterprise and Supplier Development Element: Scorecard Points Maximum Minimum Maximum Possible Score QSE Large

24 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 Maximum Minimum Maximum Possible Score QSE Large

25 24 Conclusion and Recommendations Conclusion = 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. Recommendations = 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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