Please note - this is a temporary window. id21 is joining forces with Eldis and therefore the id21 website has been suspended. Soon all id21 content will be available on the Eldis website.

Linking local people with tourism companies in South Africa

Boosting the impact of tourism on poverty reduction is an often-heard policy, but it is not always clear what commercial companies can or should do. Research in South Africa explored how tourism companies can increase their impact on local economies through normal business operations.

In South Africa, the links between tourism, growth and economic transformation have been under the spotlight after the political changes of 1993. South Africa's Pro-Poor Tourism (PPT) Pilot project was established in May 2002. This was following the realisation that the private sector needed advice, facilitation, and the benefit of shared experience, on how to boost local economic development.

The PPT project worked with five partner companies to help them implement pro-poor tourism. The project helped to develop strategies that increased local development impact in a way that also benefited their business. The results are examined in a paper from the UK Overseas Development Institute.

The projects included a casino, golf facilities, diving activities and safaris. The companies involved tried to increase local involvement and benefits through core services (such as restaurants and shopping), new tourism products (such as excursions and activities involving local cultural heritage) and accommodation (with local agreement and using local products and staff).

The research shows that:

Tourism companies can benefit from enhanced customer satisfaction, improved working procedures, suggestions for better management by the PPT Pilots and direct business benefits from the projects.
Local communities can benefit financially (through improved wages, new jobs and earnings of local enterprises) and in other ways (such as access to new markets, skills training and contacts).
While benefits are significant for certain families, they have not yet reduced local poverty levels on a wider scale.
Even though benefits so far are quite small compared to existing tourism impacts, there is considerable potential to expand these.

The findings support a ‘linkages’ approach, in which tourism businesses seek ways to develop their product, source their supplies and staff, and link with local tourism providers, in ways that simultaneously support local business. Such an approach can be costly or difficult to implement at first, but bring mutual benefits. Policymakers, in South Africa and elsewhere, can encourage such business behaviour by:

creating incentives for companies to establish pro-poor tourism, through adapting measures such as tourist licenses, concessions and marketing support
reducing costs of linkage creation for companies by helping them to set up contracts with local people and sharing information and good practice
investing in small and medium-sized enterprises, including training, regulations and assistance to comply with quality and reliability requirements of the established tourism sector
facilitating projects that involve several companies in a destination, as this will reduce the risks for individual companies and boost the benefits
adopting approaches from other industries, such as the mining industry, where links between businesses and communities have been successfully introduced
exploring how effective pro-poor tourism business approaches can be replicated outside of South Africa.

Source(s):
‘Facilitating Pro-poor Tourism with the Private Sector: lessons learned from Pro-Poor Tourism Pilots in Southern Africa’, Caroline Ashley, Working Paper 257, Overseas Development Institute, 2005 (PDF) Full document.

Funded by: Business Linkages Challenge Fund (Department for International Development); British Airways

id21 Research Highlight: 8 September 2006

Further Information:
Caroline Ashley
Overseas Development Institute
111 Westminster Bridge Road
London, SE1 7JD
UK

Tel: +44 (0)20 79220342
Contact the contributor: c.ashley@odi.org.uk

Overseas Development Institute

Views expressed on these pages are not necessarily those of DfID, IDS, id21 or other contributing institutions. Articles featured on the id21 site may be copied or quoted without restriction provided id21 and originating author(s) and institution(s) are acknowledged. Copyright © 2009 IDS. All rights reserved.

id21 is funded by the UK Department for International Development. id21 is one of a family of knowledge services at the Institute of Development Studies at the University of Sussex. id21 is a www.oneworld.net partner and an affiliate of www.mediachannel.org. IDS is a charitable company, No. 877338.