Hospitality as a catalyst for accelerating localisation
This is why the hospitality sector presents such an important opportunity for localisation.
Hospitality integrates multiple industries throughout its supply chain, from hotel décor and furniture to textiles, food, beverages and guided experiences. Each of these areas creates space to include local producers.
When we source products and services from local suppliers, we strengthen domestic industries while ensuring that tourists receive an authentic South African experience. That decision has a positive ripple effect for local entrepreneurs and industries.
StatsSA confirms that although the sector has not fully recovered to pre-pandemic levels, South Africa’s tourism sector continues to grow, with total arrivals reaching 8.92 million in 2024, marking an impressive 5.1% increase over 2023.
The sector now contributes 8.8% to GDP and supports 1.68 million jobs, according to World Travel and Tourism Council (WTTC) estimates. This positive momentum underscores the resilience of the sector, despite global economic pressures. The sector’s contribution to the economy eclipses that of the mining industry, which was once the mainstay of South Africa’s economy.
Yet the sector is often unfairly overlooked despite its significant economic contribution. The growth of tourism has the potential to serve as a powerful driver of SME development across many sectors.
Importance of SME as a driver of economic growth
Through aggregating demand for locally produced goods and services, the hospitality industry can stimulate local enterprises and create a meaningful market throughout the value chain. This includes vehicles used to ferry tourists, furniture and décor, utensils, uniforms, beverages, food supply and guided tours. When hospitality businesses prioritise local procurement, they create sustained demand that enables enterprises to grow.
South Africa is also in a unique global position because of its rich and diverse flora and fauna. Local communities possess long-standing knowledge of these resources, including their medicinal benefits. With the right support and sustainable practices, this knowledge can help build complementary ecosystems alongside hospitality, including opportunities within healthcare and wellness, with real benefits for communities.
There are, however, barriers to deeper localisation.
The influx of cheap, highly subsidised imports, particularly from China, places pressure on local textile and manufacturing sectors. These imports are often available at price points that local industries cannot match, making them attractive to hospitality operators seeking to reduce input costs.
Addressing this requires a multipronged approach. Controls at customs and points of entry must be strengthened, and institutions such as the International Trade Administration Commission must apply appropriate trade measures to protect South Africa’s manufacturing capability. At the same time, businesses need to recognise that localisation is not only about short-term cost savings but about long-term economic sustainability.
Localisation should not be viewed purely as a compliance requirement. It is a commercial decision that makes business sense.
By increasing localisation, the hospitality sector stimulates entrepreneurial development and helps create future customers with disposable income. The long-term sustainability of hospitality is closely linked to the strength of the domestic economy. Investing in local supply chains is therefore also an investment in the sector’s own future.
Platforms such as Hostex, for example, play an important role in supporting this shift. They create focused marketplaces where local producers can engage directly with hospitality decision-makers, demonstrate quality and capacity, and build trust.
For buyers, this simplifies supplier discovery and shortens the procurement process. For SMEs, it opens doors to meaningful contracts and long-term partnerships. If localisation is to move beyond discussion, there must be spaces where demand and supply connect in practical ways.
If the hospitality sector fully embraces localisation over the next five years, the impact could be significant. Procurement expenditure in the sector runs into tens of billions of rands. Redirecting a greater share of that spending towards local enterprises could revitalise rural and township economies, create thousands of jobs and generate new economic activity.
With more income circulating in communities, more businesses will grow, more tax revenue will be generated, and more consumers will be able to support the hospitality sector.
The opportunity is clear. The sector has both the scale and the influence to lead this shift.