WHY ISN’T THE LOCAL TOURISM INDUSTRY CATERING TO THE BLACK MIDDLE-CLASS?
‘The market that the sector is designed for is still the pre-1994 market. We haven’t changed the model at all.’
NOMPU SIZIBA: The tourism sector needs not only international visitors, but locals as well. However, despite a growing black middle class, the observation is that the majority do not explore and visit other parts of the country where they will do the tourist thing, spend some money and contribute to the growth and development of the industry. It seems black folks tend to travel more to see family. So, what is it that the industry can do to try and cultivate interest from the key segment of the economic community where the value proposition is such that people will jump at embarking on domestic holidays while supporting the tourism industry?
To share his thoughts on this issue I’m joined on the line by Jerry Mabena, the CEO of the Thebe Tourism Group. Jerry, what does research tell us about the growing black middle class? You don’t need to be specific about it, but I assume it has grown over the past six years or so.
JERRY MABENA: It has. Our business operates in a number of sectors, tourism being one. The second is in media, and the other the food business. I think we are seeing a resurgence of change in the context of behaviour and consumption, which is to the side of people who are earning better salaries and almost have a deficiency in time as well, those collective things. So effectively, some people are earning more and they want to go out and spend better.
NOMPU SIZIBA: Your observation is that, despite South Africa being one of the most sought-after destinations for international travellers, the black middle class generally is not exploring the country. What do the stats indicate, and why do you think this is the case?
JERRY MABENA: If you look at the growing middle class, and if you look at the car sales, if you look at the number of people buying houses in different areas, all those economic indicators, and the consumption of financial services products, which we see largely through the media tables that we have, we can then track what advertisers are focusing on, and what the market consumption patterns are, we are beginning to see that South Africans are beginning to move into those particular spaces. But I think from a travel and tourism point of view we are not getting them coming in droves. Young South Africans, particularly millennials, are likely to go overseas before they travel the country domestically.
It is worrisome, and tells you that it’s less about affordability but more about how we have curated the story of South Africa and how we have welcomed them into the various tourism attractions.
NOMPU SIZIBA: Places like Cape Town are still considered very much holiday destinations for white people. What can be done to change that perception, as the country should be open to everyone – especially if you have the cash to pay for the services?
JERRY MABENA: It’s an interesting question. Just as an example, in two weeks’ time you will have the Cape Town International Jazz Festival coming into Cape Town. Throughout that entire weekend you can hardly find a place to lay your head. People are coming in for the festival because the product has been designed to draw them into the particular space and cater for their needs.
I’m not saying that it’s only events that attract, but I think that particular product begins to say to them that here they can go to something that they want to go to, and it is designed and curated in a manner that they want to consume it. I think it’s a good example of the sort of thing that we can begin to do, even though it’s on small scale – and I think there are little things that different areas can do. People are beginning to do that on small, small scales. I think we need to get more of them happening, more often.
NOMPU SIZIBA: Yes. I suppose the industry also needs to do its part to get some buy-in. In the past we’ve had the Sho’t Left campaigns, but has the tourism industry really consistently done enough to speak to local South Africans to say, “Hey, check this or that place out”?
JERRY MABENA: I think the Sho’t Left campaign does that. It does a great job in terms of really beginning to get South Africans to consider their country and love their country. But what still becomes important is the product itself. It needs to be friendly to those markets. South Africans like to travel in groups, for instance; or let me say, black people, most of us – and I think I’m make a very, very dangerous generalisation – when we look at the patterns of how we consume stuff, stokvels are very communal by nature – the way we do burial societies, very communal in their nature.
A lot of those cultures are still there to a large extent – even when the young are growing into the middle class – such that when they do things there is still a sense of let’s go out as girls, let’s go out as a group of guys. So, when you look at how we sell products in the hospitality space, we still do things to impress. We are not incentivising groups to come to particular spaces to consume stuff.
If you look, for instance, at how the [some have things], they give you a pass for two days, because they want to keep you there for the two-day feast, not just one day that you come in and then you pay for another day. So, we will think differently about the way we do these things, and begin to think about the market that we are serving. The market that the sector is designed for is still the pre-1994 market. We haven’t changed the model at all.
NOMPU SIZIBA: Innovation, you say, needs to happen. Presumably you could cater specifically along racial lines, even, assuming that the different races have different tastes and interests. Like you say, there is always that danger of making generalisations, but if you do the right market research, if you do that right, then you can gauge how to sell tourism in the country. Of course, things like pricing and affordability would be key. We in South Africa are always crying about the affordability of things, higher inflation and so on.
JERRY MABENA: You are absolutely spot-on. I think what we need to begin to do is to give deeper segmentations in terms of the market, and the race issue here is one part. But I think you are dealing more now with psychographics, people who think in particular patterns.
The millennials have very different mind-sets to probably our generation in the way they consume products, in the way they experience the issues, in the way they communicate about those spaces. Social media is a big part of what they do – so the spaces that you create, the stuff that you do is almost, in some instances, like you need to create photogenic marketing, so to speak. People must be in a place where they can take pictures, because they want to be seen to be in those spaces.
But having created all of that, it hasn’t been curated in a good way. I went to a hotel – I think it was in Italy – and in the entire space they had spots where it was kind of “here’s the best view of the town”, “here is the best view of the ocean”. You had these spaces that were curated for you to take some of the best pictures, and they were [carefully] considered. They were very deliberate about where you get the best shot of whatever. In our instances, people will walk around – there is nothing wrong with that – but you want to be able to draw them to a place where they take their shots and put them on Instagram. That’s the generation we are dealing with. We don’t do that when we curate products.
NOMPU SIZIBA: This innovation that you are talking about – a couple of weeks ago I think it was the dti or a South African grouping anyway, went to Germany to sell South Africa, and one of the entrepreneurs there was a guy who was selling touring South Africa, but specifically for the LGBT community. He has come up with a concept of how he can entertain them with the clubs and the places that they can go to, and all of that. That’s his value proposition, which is a fantastic idea.
JERRY MABENA: Absolutely. One could argue that he is being discriminatory, but he’s not. He is basically saying, “I have a group of people who are looking for a particular experience”, and that perspective can be contained inside the group.
Again, you have safety in numbers. If you have the particular groups and they are in a space where they know that they can be themselves and be free – which is actually a sad thing in itself, but I think it’s a reality that we have to contend with as a country – then you are allowing them that space and they know that they are welcome. That for me is a big thing. It’s making people feel they are welcome in those spaces.
NOMPU SIZIBA: Okay, we’ve had this conversation, so what are you guys as Thebe doing when you are speaking at the industry level to get things moving along, and get some of these initiatives actually being put into practice?
JERRY MABENA: A couple of things. Perhaps we should arrange with one of our new CEOs to come and talk to you, because we have started an initiative – again in partnership with the dti, the Department of Tourism, and an organisation called Amadeus – called the National Tourism Visitor Information System, which begins to talk to those issues. And one of the things we are doing is collecting a database of all the MECs into a central repository – and then you’ve got a situation where we are creating technology that allows for people to book online and give feedback online in terms of experiences. All of those things are beginning to widen the market base for, in particular, small and medium enterprises that we want to come into the tourism space. Basically, that uses technology for anyone to say to yourselves that it needs to happen.
And then on the flip side of that, as a company we are beginning to look at developing attractions, some of our iconic attractions, and we are really doing some innovative things. One of the things we are doing during December is we’ll be launching a unique experience, which is a hotel on a bridge in the Kruger National Park, which is going to be the only one of its kind that I know of. There may be one [elsewhere] in the world, but I’ve never heard of it, where you’ve got an entire five-star hotel that literally sits on a bridge and overlooks a beautiful river. You can actually watch animals from your room right up at the top.
We are looking at taking over a couple of other assets and creating what we call, again, safe spaces for the market in a space they wouldn’t ordinarily want to get into.
We will probably be launching in the next two to three months a concept of a hotel that pops up in unique spaces, to allow people like yourself to go to places that ordinarily you wouldn’t be able to stay or live in, or even do something in.
Currently we talk to those things. You go to a place like the Drakensberg, for instance, and you find an experience there. But it’s to pop up a product that is five-star, that can attract people like yourself and, after the period, it moves away.
So, we are really beginning to explore stuff that hasn’t been done before. It’s dangerous ground, but we think that somebody has to try and see how it works, and we believe that the market we are speaking to will embrace the product.
NOMPU SIZIBA: Our thanks to Jerry Mabena. of the Thebe Tourism Group.
This article was first published by Moneyweb on the 22 March 2019.