An Analysis of Challenges obstructing Growth of SMEs in the South African Tourism Sector: A theoretical evaluation

Abstract

The study empirically sought to analyse challenges inhibiting the growth of Small and Medium Enterprises (SMEs) within the tourism sector in South Africa. The study employed qualitative research design following the in depth interviews in order to gather data form tourism SME owners and managers in South Africa, who formed the sample population for the study. A sample of 20 respondents was drawn using purposive sampling approach. The participants who were selected were tourism SME owners and managers of guesthouses, lodges and bed and breakfast houses, shuttle transport, art and craft curio shops and agricultural sector. The researchers has provided a perspective on the role of tourism SMEs in South Africa.  The study identified the hindering challenges for tourism SMEs development and growth as lack of access to funding, inadequate or unavailable government funding, lack of entrepreneurial and management skills to operate their businesses, lack of networking connections, poor location of SME operations and stiff competition for well-established SMEs. The recommendations were made that alternative funding strategies should be used, SME owners and managers should be trained, the SMEs should join network groups and share ideas, and they should also invest in marketing and communication technologies for their products to be known to the market.

Keywords: Small and Medium Enterprises, tourism, economic growth, inclusive growth

DOI: 10.7176/EJBM/12-22-06

Publication date:August 31^st 2020