Experiences of black-owned Small Medium and Micro Enterprises in the accommodation tourism-sub sector in selected Durban townships, Kwazulu-Natal.

• Main Authors: Mthokozisi Mtshali, Oliver Mtapuri, Slindokuhle P. Shamase
• Format: Article
• Language: English
• Published: AfricaJournals 2017-05-01
• Series: African Journal of Hospitality, Tourism and Leisure
• Online Access: http://www.ajhtl.com/uploads/7/1/6/3/7163688/article_24_vol_6__3__2017.pdf

Small, Micro and Medium Enterprises (SMMEs) contribute to South Africa’s Gross Domestic Product. The aim of this article is to unpack the lived-experiences of SMMEs in the accommodation and tourism sub-sector in the three townships of Umlazi, Clermont and Inanda in Durban. SMMEs which took part in the study pursued product, price and quality as hallmarks of their differentiation thrust. While some products on offer were essentially not unique, client services and prices did matter. As such, price competition, product and after-sales-services seemed to be the dominant strategies pursued in marketing their businesses. From their subjective perspective, constraints both in accessing initial and in working capital to meet day-to-day business operations were identified as the key factors that affect the survival of SMMEs. The study also reveals that bank financing is beyond the reach of most of these SMMEs, as many were denied loans due to a lack of collateral security. The government could help these SMMEs through a new vehicle that takes into consideration the lack of substantial collateral because only government can do that. Their other main challenges include the difficulty of building a credible client base, competition, locational disadvantages, a low networking profile and lack or absence of effective government support systems. This research recommends that business owners need to be educated about the kind of business they want to venture into before they get approved for funding.