Smaller tourism businesses hamstrung by late payments and red tape

CEO of Cape Town Tourism, Enver Duminy shares some of the challenges faced by emerging players in the tourism industry, that hinders their growth.

He speaks of the red tape some of the SMMEs have to deal with in order to become government suppliers and difficulties in getting payments for the services rendered.

Government departments are difficult when it comes to paying for services rendered and that kills the sustainability of small businesses, he adds.

The complexities of collecting and chasing that money when you don't get is still a reality.

Enver Duminy, CEO of Cape Town Tourism

This happens specifically in the accommodation sector. Because it is government, there is no deposit. they will therefore get someone to come and stay, and after the service has been rendered, the challenge continues.

Enver Duminy, CEO of Cape Town Tourism

Cash is king and that's how small businesses survive ... any delays in cash payments has major impacts.

Enver Duminy, CEO of Cape Town Tourism

Duminy says the study they conducted about three years ago indicate that businesses fail in the first five years because of lack of cash flow.

He notes that the challenges not only occur in the Western Cape but it is a nationwide problem.

To hear more of this interview, listen below:


This article first appeared on CapeTalk : Smaller tourism businesses hamstrung by late payments and red tape


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