September is Tourism Month in South Africa, and when people travel, they need places to stay, eat and be entertained. In celebration of Tourism Month, we look at what entrepreneurs can and should do to excel within the hospitality industry.
Covid-19 dealt a terrible blow to tourism and hospitality, but over the past three years this sector has recovered strongly. According to Statistics South Africa in 2023, almost 8.5 million international tourists from across the world visited our country – a 48.9% increase compared to 2022.
Based on these figures, tourism is clearly a growth industry with countless opportunities. But it is also a highly competitive market in which you need to excel to succeed and stand out from your competitors. Kevan Govender, Regional Investment Manager for Business Partners Limited’s East Coast region, shares his top four recommendations for businesses to gain success within the tourism and hospitality industry.
- Understand your target market, and your business market
This means researching the local market in which you want to operate, as well as the visitors you want to attract. What is currently going on in the tourism scene around you? Answer this question by looking into the popular attractions, relevant regulations and the strengths, weaknesses and market positioning of existing businesses.
At the same time, develop an understanding of your target market as well as their needs, and what cultural nuances are in play. With this information you can develop a clear and compelling unique selling proposition (USP) that will let your business stand out from the competition and attract customers. Furthermore, building strong networks by attending conferences, joining professional associations and collaborating with other businesses can give you valuable insights and opportunities.
- Prioritise customer service
From booking to checking out, your guests must feel like the most important people in the world. Hire staff with exceptional people skills and develop and refresh those skills with regular training. Also remember to reward your team members appropriately.
Offer amenities and experiences that tie in with your guests’ interests and needs, and never compromise on cleanliness anywhere in your establishment. According to the Unilever Professional website, 60% of guests consult hotel reviews on platforms such as TripAdvisor before making a reservation, and 71% only consider hotels with ‘above average’ cleanliness ratings. In a people-oriented business, feedback is everything, so do all you can to get your guests to tell you what they liked and didn’t like about your business – before you read about it in a social media review. Bad reviews kill turnover.
- Manage your finances strategically
Start with a detailed business plan that sets out financial projections, funding sources, risk management and marketing strategies. Implement cost-control measures to limit spending and boost profitability, and regularly review your budget, cash flow and expenses.
Tourism is a seasonal business; hence you must prepare for fluctuations. For instance, stabilise your income with promotions or events to attract guests in the off-season and partner with other local businesses to offer deals that create multiple revenue streams for all of you. Also, build a separate emergency fund in case of emergencies and catastrophes (such as a global pandemic) and employ the right financial people. You cannot do everything; and a good accountant is worth their weight in gold.
- Stay updated on industry trends
Old-style hospitality needs cutting-edge technology these days. According to the African Hospitality Confidence Index 2024, one in four African hotels and hospitality businesses are using artificial intelligence (AI) to streamline their operations and enhance guest experiences. Embrace AI, social media, search engine optimisation (SEO) and online advertising to reach new markets. Environmental awareness is a trend and a necessity.
Energy- and water-saving and waste-reduction measures will appeal to guests while boosting the sustainability of your business. Finally, stay informed about changing industry regulations and compliance requirements to ensure that you always operate legally.
The hospitality industry in South Africa is projected to grow by more than 4% per annum to reach almost R30 billion by 2029. With good planning and meticulous execution, you can secure a slice of this lucrative pie.
About the Author: Kevan Govender
