BLACK ECONOMIC EMPOWERMENT AND LOCAL ECONOMIC DEVELOPMENT IN THE ACCOMMODATION SECTOR: THE CASE OF CLARENS, IN THE FREE STATE PROVINCE BY NYANE MACDONALD EZEKIEL MOFOKENG A DISSERTATION SUBMITTED IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTERS OF TECHNOLOGY FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF HOSPITALITY AND TOURISM IN THE DURBAN UNIVERSITY OF TECHONOLOGY SUPERVISOR CO-SUPERVISOR DR. A. GIAMPICCOLI DR. S JUGMOHAN DECLARATION I, Nyane Macdonald Mofokeng, hereby declare that the dissertation entitled “Black Economic Empowerment and local economic development in the accommodation sector: The case of Clarens, in the Free State Province” is my own work and has not been submitted for any other degree at a university. Furthermore, it represents my own opinions and not necessarily those of the Durban University of Technology. …………………………………………………………………….. ………………………………………… NYANE MACDONALD MOFOKENG Date i DEDICATION This study is dedicated to my family, my father, Kgosi Mofokeng, my mother, Rose Mofokeng, and my sister, Cecilia Mofokeng, for constant support and motivation for me to complete this study. You are dearly loved. To you, Pap’s, I say thank you for your insistence on education. I hope this dissertation shows that your tireless work in getting me and Cece educated has paid off, I hope I’ve made you exceedingly proud. To you, Tsump, I will always remember our very long conversations on the phone that were and are always filled with a lot of laughter. They made my day and allowed me to see the rainbow at the end of this study. To you, Sparana, I say thank you for being an easy target for me to tease. Making fun of you was one of the best times I had in a day. To Thuli Ndlovu, words can’t articulate just what this journey has been like. Thank you for being a friend, a partner and the rock upon which I could always lean. Love you always Kati. ii ACKNOWLEGEMENT I humbly wish to acknowledge the roles and contributions of the following people in the process of conducting this study: Dr Andrea Giampiccoli, who is, without a doubt a wonderful researcher and who has been a source of guidance and support. I thank you Doc for your patience and the fact that your office door was always open for me whenever I needed it. Dr Sean Jugmohan, for your constructive advice and motivation. For being willing to always go the extra mile in ensuring we get the job done. Dr H L. Garbharran, for editing my work. Durban University of Technology and the National Research Foundation, for the financial support throughout the duration of this study. Lastly, to the many establishments in Clarens for allowing me to conduct my study. iii TABLE OF CONTENTS ...................................................................................................................................... i DECLARATION ..................................................................................................... i DEDICATION ........................................................................................................ ii ACKNOWLEGEMENT ......................................................................................... iii LIST OF FIGURES ............................................................................................. viii LIST OF TABLES ................................................................................................ ix ACRONYMS ......................................................................................................... x ABSTRACT .......................................................................................................... xi CHAPTER ONE .......................................................................................................... 1 BACKGROUND TO THE STUDY ............................................................................... 1 1.1 Introduction ........................................................................................................ 1 1.2 Background and context .................................................................................... 2 1.2.1 Conceptualising Black in the context of transformation .................................. 3 1.3 Rationale for the study ....................................................................................... 4 1.4 Problem statement ............................................................................................. 5 1.5 Aim and objectives of the study ......................................................................... 6 1.6 Limitations of the study ...................................................................................... 6 1.7 Benefits of the study ........................................................................................... 7 1.8 Definition of concepts and terms ........................................................................ 7 1.9 Structure of the dissertation ............................................................................... 8 1.10 Conclusion ....................................................................................................... 9 CHAPTER TWO ........................................................................................................ 10 LITERATURE REVIEW ............................................................................................. 10 2.1 Introduction ...................................................................................................... 10 2.2 Tourism ............................................................................................................ 10 2.3 The history of tourism in South Africa .............................................................. 11 2.4 The history of tourism in Clarens ..................................................................... 13 2.5 Local Economic Development and its purpose ................................................ 14 2.6 Tourism in the framework of local economic development context .................. 15 2.7 LED in the South African context – Pro-growth vs Pro-poor ............................ 20 2.8 Black Economic Empowerment in South Africa ............................................... 21 2.9 Effectiveness of BEE ........................................................................................ 26 iv 2.10 BEE and its implementation in South Africa ................................................... 28 2.11 Role of Black directors employed in listed companies ................................... 32 2.12 B-BBEE success and challenges ................................................................... 33 2.13 BEE/Affirmative Action a global context ......................................................... 33 2.14 Transformation of the tourism industry ........................................................... 37 2.15 BEE and transformation of the tourism sector ............................................... 37 2.16 BEE led transformation within the small tourism sector ................................. 38 2.17 The Tourism Charter and Tourism BEE scorecard ........................................ 43 2.18 Participation of Black people in the tourism industry ...................................... 43 2.19 Ownership of tourism businesses .................................................................. 45 2.19.1 Defining Black ownership of a company ..................................................... 45 2.19.2 Black businesses’ ownership constraints .................................................... 46 2.19.3 Employment equity ...................................................................................... 47 2.19.4 Gender Equity ............................................................................................. 56 2.19.5 Preferential procurement ............................................................................. 58 2.20 LED and BEE within tourism: a summative context of the literature .............. 60 2.21 Conclusion ..................................................................................................... 63 CHAPTER THREE .................................................................................................... 65 RESEARCH METHODOLOGY ................................................................................. 65 3.1 Introduction ...................................................................................................... 65 3.2 The area under study ....................................................................................... 66 3.3 Research design .............................................................................................. 69 3.4 Qualitative research design .............................................................................. 69 3.5 Quantitative research design ........................................................................... 70 3.6 Population and sampling .................................................................................. 70 3.7 Sampling .......................................................................................................... 71 3.8 Data collection .................................................................................................. 72 3.9 Data analysis .................................................................................................... 73 3.10 Reliability ........................................................................................................ 73 3.11 Validity ...........................................................................................................