B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA Prepared on behalf of the Association of Southern African Travel Agents by Grant Thornton
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
www.asata.co.za Report by GRANT THORNTON
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
B-BBEE PROFILE OF THE TRAVEL SECTOR IN 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).
www.asata.co.za Report by GRANT THORNTON
03
Objective of the Travel Market Index study
Methodological approach
Measuring B-BBEE in the Travel sector
B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA
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)
www.asata.co.za Report by GRANT THORNTON
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
B-BBEE PROFILE OF THE TRAVEL SECTOR IN SOUTH AFRICA
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.
www.asata.co.za Report by GRANT THORNTON
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 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%
Qualification (achieved scorecard score) B-BBEE Recognition LevelB-BBEE Status
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
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.
www.asata.co.za Report by GRANT THORNTON
06
Compliance requirements
EME compliance (Annual Revenue <R5 million)
QSE compliance (Annual Revenue R5 to R45 million)
Large Enterprise compliance (Annual Revenue >R45 million)
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
Tourism QSE Scorecard
www.asata.co.za Report by GRANT THORNTON
07
Ownership
Management Control
Indicator
Voting Rights
Measurement Category & Criteria
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%
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
08
Skills Development
Measurement Category & Criteria
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:
Ÿ AccommodationŸ Hospitality and related servicesŸ Travel and related services
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%
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
09
Enterprise and Supplier Development
Socio-Economic Development
Measurement Category & Criteria
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
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
5
7
3
1
10
60%
1% of NPAT
2% of NPAT
Yes
1% of NPAT
30%
Measurement Category & Criteria Weighting Points
Compliance Targets
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
Tourism Large Enterprise Scorecard
www.asata.co.za Report by GRANT THORNTON
10
Indicator
Voting Rights
Measurement Category & Criteria
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
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
Measurement Category & Criteria
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%
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
12
Skills Development
Socio-Economic Development
Measurement Category & Criteria
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:
Ÿ AccommodationŸ Hospitality and related servicesŸ Travel and related services
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
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
13
Enterprise and Supplier Development
Measurement Category & Criteria
Preferential Procurement
Supplier Development
Enterprise Development
Bonus Points
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
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
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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%
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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%
Target Average Maximum Minimum Percentagewith 100%
Percentagewith >30%
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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%
Target Average Maximum Minimum Percentagewith 100%
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%
Target Average Maximum Minimum Percentagewith 100%
Percentagewith >30%
40%Black
25%Black Female
Target
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
Other Executive 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
Maximum Possible Score
13
17
11
21
Large
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
Other Executive 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%
Average Black People
Average Black Female
Target Black
Target Black Female
Management Control Element: Scorecard Points
Average
Maximum
Minimum
Maximum Possible Score
12
18
8
18
QSE
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
Other Executive Management
Middle Management
Junior Management
Average Black People
Average Black Female
39.0%
66.7%
50.0%
54.5%
56.5%
22.0%
60.0%
0.0%
45.5%
20.4%
Board Participation
Senior Management
Other Executive Management
Middle Management
Junior Management
Average Black People
Average Black Female
41.5%
38.0%
44.2%
50.6%
63.8%
23.9%
27.0%
30.5%
38.4%
44.1%
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
Maximum Possible Score
18 17
30 22
10 10
30 25
QSE Large
Average
Maximum
Minimum
Maximum Possible Score
27 34
38 39
21 28
30 42
QSE Large
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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
Maximum Possible Score
7 5
10
5
8
4
10 8
QSE Large
THE SOUTH AFRICAN TRAVEL SECTOR IN 2017DRAFT EXECUTIVE SUMMARY
www.asata.co.za Report by GRANT THORNTON
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.
www.asata.co.za
HEAD OFFICE:Suite 6, Lower Ground Floor, Block AHurlingham Office Park, 59 Woodlands AvenueHurlingham Manor
P O Box 650539Benmore2010
Tel: + 27 11 293 0560/1Email: [email protected]