Strategies employed for the sustainability of township tourism small medium and micro enterprises

Abstract

The Small, Micro, and Medium Enterprises (SMMEs) sector is perceived as an economic engine for many countries. SMMEs are viewed as the primary creators and drivers of new businesses in the South African economy. The township tourism SMMEs are critical to the upliftment of the rural and township economies, however, they remain marginalized, continue to struggle to be sustainable, and face a variety of challenges that have a negative impact on their contribution to economic growth. This study aimed to examine the strategies employed for the sustainability of township tourism SMMEs. The objectives were to identify SMMEs involved in tourism in the townships, establish factors influencing the sustainability of SMMEs in the township, and determine the competitive strategy for the sustainability of tourism SMMEs in the townships. To guide the present inquiry, Porter’s Five Force’s for Industry Analysis (1980) was employed. A positivist research paradigm was adopted, through a quantitative approach and a survey research design. The population targeted for this study were township tourism SMMEs operating in UMlazi Township in KwaZulu Natal. There being no reliab le available sampling frame, a non-probability sampling strategy was adopted. Within non-probability, snowball sampling was used. Through the sampling strategy, owners and/ or managers of township tourism SMMEs were purposively approached and they suggested other SMMEs to consider for inclusion. A questionnaire was used for gathering data. Data was analyzed using descriptive statistics, presented in tables, graphs, and percentages. The leading township tourism attractions in Umlazi were found to be in the lifestyle and entertainment category in particular food, beverage, and accommodation. In this regard, restaurants and BnBs dominated. Most SMMEs have been operating between 1-3 years and the majority were Micro enterprises. The number of registered and non-registered SMMEs was nearly equal, a larger number of SMMEs were located in fixed physical structures, with a smaller number offering mobile service/non-fixed services and/or operating online. A high number of businesses were located in residential areas, next to the taxi rank, and operated as sole proprietors and informal businesses.The most influential factors affecting the sustainability of township tourism SMMEs were the lack of funding, strong business competition, poor business location, lack of business skills, and high crime rate. It was revealed that only a few entrepreneurs applied a competitive strategy. Some of the used competitive strategies included registration of the businesses with the Department of Small Business Development, social media marketing, and bulk buying. The study recommends township tourism SMME diversification instead of the current focus which is food, beverage, and accommodation. SMMEs should consider operating their business remotely and/ or mobile non-fixed physical structures, as well as having a web presence and optimizing location to improve sustainability given that some of their sustainability are curtailed by their non-optimal location.