A risk management model for the tourism industry in South African
The primary objective of this research was to develop "A Risk Management Model for the Tourism Industry in South Africa", when viewed from a business perspective. To achieve this objective, a number of secondary objectives were established, these being: 1 To explore relevant existing theories and models related to risk and risk management within tourism businesses and the tourism industry in general 2 To analyse domestic and international risks associated with the domestic tourism industry 3 To conduct a survey to determine those risks that should, from a manager's (supply side) perspective, form part of the model 4 To draw conclusions from the empirical analysis for the inclusion of risks in the risk management model and to make recommendations as to how the risk management model can be implemented by role players of the tourism industry Risk is inherent in every sphere of life and, no matter the size of the risk, it will have a detrimental effect and cause damage in some way. This study examines the steps that the industry has taken regarding actions necessary to prevent or limit risks. Since the advent of universal suffrage in 1994, South Africa has attracted significantly more visitors to the country's shores. With an increase in tourism traffic, there is always an increase in risk. Additionally, the literature review indicated not only an increase in the frequency of risks, but that no well-accepted risk management model exists within the industry. The study investigated both domestic and international risks and their effects on the industry from a business perspective. The categories of risk include, but were not limited to, natural risks, crime, health and safety, political factors, economic risks, technological risks and socio-demographic risks. A literature study into the existence of a suitable risk management model for the tourism industry (Chapter 2) revealed that, although a number of models existed, there were none specifically for the tourism industry. This emphasised a need in the tourism industry, which was subsequently confirmed by further literature study into the risks that can be associated with the tourism industry (Chapters 3, 4 and 5). To assist with the construction of an appropriate risk management model, a number of risk management models from other industries and disciplines were examined to obtain a structure that could be useful to the tourism industry. Further literature study revealed that, even though mentioned by a number of authors, these authors did not recognise risks that were prevalent and specifically associated with tourism. No literature source was found that provided either complete or detailed discussion of risk and risk management aimed specifically at the tourism industry worldwide. This supports the view that there is also no specific risk management model for use by the tourism industry. The in-depth literature study looked into potential risks associated with the tourism industry from a domestic and international perspective. With reference to the South African tourism industry, domestic risks include those risks that are internal and external to businesses operating within the industry (Chapters 2 & 3). A structured questionnaire was sent out to 800 operators and owners of businesses in the industry, to tour operators, travel agents, guesthouses, bed and breakfast establishments and lodges registered with the Association of Travel Agents (ASATA) and with the South African Travel Services Association (SATSA). The results obtained from the 212 valid questionnaires returned were used as input to the model. The study, through empirical research, was able to establish which risk factors had the greatest effect on the industry and which factors had little or no effect on the industry. The analysis of risk, taken from the questionnaires, did not provide evidence that tourism businesses are equally affected by most factors (categories of risk). The analysis does, however, indicate that infrastructure, particularly in the areas of both domestic and international marketing, has the greatest perceived risk followed by safety (safety of the business) and thereafter by finance. The lowest perceived risk was in the area of organisational risk, which includes internal and external business risks, largely involving staff and their ability to manage the business. The analysis, however, did show that there is a need for training. The topic of safety highlighted that tour operators and travel agents, due to the nature of their business, saw this as important whereas guesthouses and bed and breakfast establishments were less likely to attract international guests and were therefore not strongly influenced by aspects such as airline safety, exchange rates and currency fluctuations. The study highlighted the fact that some categories of risks significant to one business sector may not have the same affect on another sector. However, this did not adversely influence the development of the model. This research has identified two significant deficiencies in respect of risk management in the (South African) tourism industry - that there is no literature source that provides an in-depth discussion of risks and risk management in the tourism industry, and that there is no generally accepted risk management model and process for use by the industry. In view of this, this research has made a valuable contribution to the existing body of knowledge related to the tourism industry by: * Highlighting the importance of identifying risks as well as a more formal approach to risk management for the Tourism Industry * Identifying various risks that could have an impact on the industry * Showing that risks differ from sector to sector within the Tourism Industry * Developing a risk management process and model, which has not existed before, in the tourism literature * Providing a user-friendly tool for use by tourism industry operators to manage risks specific to their business, thereby reducing the negative impact of domestic risk on the business and industry and also maximising the benefit that may be obtained by exploiting the external risks * Highlighting the complexity of managing risks from a destination point of view A final contribution is that this is the first research of its kind in the South African tourism literature. Based on the study of both local and international literature sources, the above contribution is not only of value to the South African tourism industry, but worldwide.