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Tourism Codes

Following Government’s bold vision to create inclusive growth in the tourism sector in 2009, a new era was born for South Africans operating in and with the tourism sector.

The answer to Government’s vision, was to create a BBBEE Charter which expresses the commitment by public and private sector companies to make the tourism sector more accessible, beneficial and relevant to all South Africans.

Creating the Charter was based on the need to transform and develop a globally competitive destination. This is inextricably linked to our ability to attract more visitors and to provide them with unique, memorable experiences as well as to grow sustainable tourism in South Africa.

With that said, a new council was appointed in 2012 with representatives from civil society, tourism businesses and labour to align the existing Charter with a new set of BBBEE codes.

In brief, the updated scorecard sees compliance under the Ownership element is 30%. This will ensure an increase in transferring economic assets to and mainstreaming of black people in the tourism sector.

Under the Skills Development element, three measurement indicators were introduced to promote skills development expenditure on three tourism sub-sectors namely; accommodation, travel and hospitality. The indicators are broad enough to support and ensure enterprises eager to invest in training consulting, management and professional positions in the sector.

In terms of the Enterprise and Supplier Development (ESD) element, the compliance target for the supplier development measurement category is set at 3% Net Profit After Tax (NPAT). This target ensures equal opportunities are created for emerging black-owned enterprises across the supply and value chains of businesses. Another key point under the ESD element is the allocation of more points for procurement spend from empowering suppliers that are at least 51% black-owned. The weighting points allocated (12 in total) are to incentivize support for sustainable growth of black enterprises.

Other amendments to consider:

  • Three bonus points under the Socio-Economic Development element, have been allocated to entities that contribute to Tourism Marketing South Africa (TOMSA).
  • The gazetting of the amended codes means that the code is legally binding to all entities in the tourism sector from the date of its publication (20 Nov, 2015).

Key objectives for the amendments:

  • Advance BBBEE within the tourism sector.
  • Establish the framework and principles upon which BBBEE will be implemented in the tourism sector.
  • Facilitate a partnership programme as outlined in government’s strategy for BBBEE.
  • Provide the basis for the sector’s engagement with other stakeholders.

The sub-minimum requirements for the Priority elements*:

  • Ownership: 40% of the Net Value (40% of the 8 points).
  • Skills Development: 40% of the total weighting points (excluding bonus points).
  • Enterprise and Supplier Development: 40% of the total weighting points of each of the three measuring categories within the Enterprise and Supplier Development element, namely; Preferential Procurement, Supplier Development and Enterprise Development.

*Large enterprises are required to comply with all three priority elements, whilst Qualifying Small Enterprises (QSEs) are required to comply with at least two priority elements, namely Ownership and one other.

If qualifying companies do not comply with the 40% minimum requirement of any of the priority elements, the result will be a BBBEE Status Level and corresponding BBBEE Recognition Level being discounted by one level down until the next applicable verification period.

Exemption from compliance:

Exempted Micro Enterprises (EMEs) are defined as enterprises with a total annual revenue of R5 million or less. An EME is however required to obtain a sworn affidavit or Companies and Intellectual Property Commission (CIPC) certificate on an annual basis to confirm annual revenue.

The verification process:

The verification of tourism enterprises for BBBEE compliance must be performed by a Verification Professional or a Verification Agency accredited for tourism by the BBBEE Verification Professional Regulator appointed by the Minister of Trade and Industry.

For any assistance you might require in order to be compliant or to measure existing compliance, please contact our team at Summit who are highly skilled and informed about the latest amendments.

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