Differentiate or die

Constantly changing micro and macro global factors like Brexit, the Chinese slowdown, SA’s stagnant market, the growth of the sharing economy, and even the “Trump Effect” can have a huge impact on tourism into South Africa.

In a session entitled, ‘Planning for a sustained future’ at the SATSA Conference 2016, Martin Wiest, MD of Tourvest Destination Management, said companies have two options when it comes to responding to this rapidly evolving environment. Businesses can either specialise, or they can invest in technology in order to compete with the disrupters in the industry.

“The problem is that majority of South African tour operators operate in the middle, but they will have to shift either to the left or right, as the grey zone in the middle will disappear,” he said.

Wiest said TDM responded by diversifying its business. For Tourvest, the 2010 FIFA World Cup was the catalyst for this and it launched a sports DMC, but it can also mean going into new source markets, targeting new types of customers, looking at new technology add-ons, or moving outside the borders of SA.

Steve Ellis, CEO of Personal Africa said when launching his business seven years ago, he knew he was entering an already very competitive space. “We decided that we had to specialise and go after a niche market. We were up against incredible technologies and huge tour operators with big buying power, so we had to offer service,” said Ellis. “It was this dogmatic approach of servicing a specific need that created the business we have today, and we sustain this by investing our staff and giving them a great deal of autonomy.”

Wiest said another major threat to the sustainability of tourism businesses was the lack of new talent entering tourism. “For some reason our industry is no longer attractive to school and university leavers at the moment. Despite learnerships, we are unable to fill all the open positions in our organisations and as an industry, we have a responsibility to create an attractiveness around our industry and change this,” he added.