By Glenn Ashton · 30 Jan 2012
The South African tourism industry has grown tenfold over the past two decades. Tourists appreciate a benchmark to assist them in their choice of accommodation, for two reasons: First to indicate a consistent set of standards and second, to maintain these over time. However there are fundamental problems with the South African national tourism grading process, which require urgent attention.
The body responsible for assessing the quality of tourist establishments in South Africa is the Tourism Grading Council of South Africa (TGCSA). This organisation evolved out of the old Hotel Grading Board, established during the mid-1960s and re-constituted and launched as the TGCSA in 2000.
The grading council falls under the aegis of Tourism South Africa. While nominally independent, TGCSA is part of a de facto government body, heavily subsidised by the state. It must be questioned whether it is correct for a state run organisation to hold a monopoly right to not only set standards but to manage and monitor them across an entire industry. In most other industries quality control is externally managed by independent assessors through organisations like the International Standards Organisation (ISO) or by the industry itself.
The monopolistic nature of TGCSA is especially problematic for smaller, less powerful members, who constitute the majority of members. Larger, more powerful players such as the formal hotel industry dominate. The entire system is not only tailored to their needs but more importantly, is far less costly to larger organisations.
For instance a small, budget facility can pay around R1500 per unit in annual grading fees. On the other hand a 50-room unit charging in excess of R5000 per night would pay only R100 per unit. Larger, mid-range hotels would pay less, around R25 per unit. This is clearly inequitable and has the direct result of stifling competition. A flat unit rate should be charged. This would enable subsidisation of small, emerging entities by large, not vice versa, as presently happens.
Between 2009 and 2011 the cost for grading increased by around 100% for small establishments, during a time of serious contraction within the industry. Consequently the TGCSA experienced a 22% drop in membership over the period when new fees and structures were introduced.
Most of the members who left were from the small B&B, self-catering and guesthouse market, predominantly from the Western Cape. Membership numbers from these sectors continue to dwindle.
Herein lies the core problem: Most tourists do not visit South Africa to have a homogenised, standardised, sterile Holiday Inn-type of experience. Visitors usually wish to experience local hospitality and the qualities, which make us unique – each according to their own tastes!
When TGCSA revamped its grading system it brought in the global accounting group KPMG as consultants to “improve” the system. The results were predictable; putting bean-counters in charge of standardising tourism created a bland, cookie-cutter, tick the box approach to grading.
Television sets are now mandatory for certain establishments, be they in a game park in the middle of the Kalahari or in Jo’burg central. So too with air-conditioning in an age of global warming and unreliable Eskom power supplies.
Of course ‘green’ credentials get a nod but only in order to fulfil the criteria of green-wash. Solar water heating, LED lighting, recycling, natural ventilation, design and adaptation to local climatic conditions are given little consideration. Yes, they are mentioned, but not much more. Instead towels should be washed daily, large fridges are scored highly and dishwashers should be provided.
When TGCSA considered updating its grading criteria, members were informed and comment invited. Feedback was apparently ignored and certainly not acknowledged.
While the new criteria align with some global standards for large hotels, they are out of step with the requirements of most modern travellers whose expectations are met by smaller, more flexible and specialised venues.
Then there is the important matter of exclusivity. For instance research on the TGCSA website, as well as elsewhere on the Internet (where most tourists do their research before embarking) finds very few graded establishments in the growing township tourism niche.
Interviews with owners of township accommodation indicate that cost remains a major barrier to assessment. Equally, the ease of engagement and accessibility of the system has alienated many. Very few owners felt able to spend a few thousand Rands a year in a market, which has suffered a notable downturn since 2008, with no discernable advantages to graded establishments.
Viewed against the goal of harnessing tourism as a major economic growth driver, these sorts of contradictions emphasise an intrinsic failure to practically implement stated government policies. As usual it is the poorest, grassroots sector, which remains the most marginalised.
The critique from more upmarket suburban and country guesthouse owners, many with long track records, echoed the sentiments of their township colleagues. Little advantage was perceived in being graded and they found TGCSA un-responsive, bureaucratic, expensive and arrogant. They saw the recent changes as arbitrary and uncanvassed. Most tellingly they considered that the money spent on grading could be spent far more effectively in other marketing or upgrading programmes.
It is not only clients who are dissatisfied with the service of the grading council. It appears the organisation is haemorrhaging assessors. Several highly experienced assessors have recently left because of allegations of poor management and job related stress. When things go wrong, it is the employees who tend to catch flak. Because assessors rely on commissions, the precipitate drop in membership has meant a similar drop in their income.
What are some solutions to this imbroglio?
Firstly, the Competition Commission should examine the lack of competition, which has been legislated into the grading of this industry. Yes, there are one or two other grading organisations but they lack the recognition and clout of TGCSA. This whole thing should be thrown open in order that it can become more commercially competitive. A monopoly is a monopoly, legislated or not.
Secondly, it is unreasonable to increase fees, by double in some cases, during an unprecedented industry contraction. This is not simply gross insensitivity by the TGCSA but demonstrates the degree to which this body has become alienated from the realities experienced by its customer base (“stakeholders” in government speak), and more critically, from the actual requirements of the tourism industry as a whole. It is telling that significantly less than half of all accommodation establishments are presently graded.
Third, there must be a concerted emphasis on diversification in our tourism industry. We do not need a homogenised, ersatz model. There remains a marked dominance of big players in the industry in Tourism SA. The chair of TGCSA is an ex-employee of the Sun Hotel group, a major player in the industry. He is clearly out of touch with what his smaller members think or experience. This must change.
Township tourism and the many other niche markets must be actively encouraged, not neglected. Yes there may be subsidies, but who knows about them? Are they effectively managed? Paying full fees up-front and waiting for refunds places an unrealistic expectation on start-up businesses in this competitive and depressed sector. An equitable pricing system must be introduced.
The South African tourism ministry has imposed a rigid, bureaucratic statutory approach to standardising the tourism industry. It clearly requires a gentler, more responsive approach.
Participants must be directly involved. Small tourism establishments are not adequately represented at the board level of Tourism South Africa, let alone at the TGCSA.
This all demonstrates a failure in effective management. Instead of facilitating a process, yet another level of bureaucratic red tape has been put in place. This runs directly counter to stated government policy to reduce unreasonable administrative burdens.
Yes we need standards. Yes we must grow our tourism business. But are we going about this effectively? From the perspective of managing standards across this important sector, supposedly prioritised by government because of its growth and employment potential, we appear to be moving backwards rather than forwards. It is time for a sea change. And let us always bear in mind, vive la difference, viva the REAL South African tourism experience!
** Declaration: The writer has interests in the small tourism sector.
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