Attracting black investment into the South African hotel sector

M.Phil.Abstract: Orientation: For a long time, much scholarly research and writing have focused on the hospitality management side of the hotel industry, with limited consideration of the so-called hard business core of the hotel industry. This highlights the need to reveal some of the aspects that put hotels on par with other forms of hard business, especially in the context of developing economies such as that of South Africa. This appears to have limited many people in venturing into this industry, notably black entrepreneurs, who have made inroads into other economic sectors. Considering the segregated development history of South Africa, black entrepreneurs are often found at the bottom of the tourism business ownership pyramid, especially in the accommodation industry, which includes the capital-intensive business of investment in and the management of hotels. In this study, the word black is used in accordance with the definition contained in the South African government’s Broad-based Black Economic Empowerment Act, meaning African, Coloured, and Indian persons. However, in view of the exclusion from economic participation of black people under the apartheid regime, the study focused on gathering evidence on the lack of capital investment by black African and Coloured persons in the hotel industry in South Africa. Research purpose: The aim of the study was to determine the reasons for the little capital investment by black entrepreneurs with investible capital in the hotel industry in South Africa. The investigation was done by engaging a selection of key leaders and executives who were directly and indirectly involved in the hotel industry. By engaging these leaders and executives to share their own experiences and impressions on the research topic, I was able to learn about and deepen my understanding of the various elements preventing black entrepreneurs from getting involved in the hotel industry. Motivation for the study: The relevance of this study is founded in the hotel industry being one of the four capital-intensive industries within the tourism sector, as well as the most visible representation of tourism as an economic sector. This industry is globally recognised as a significant contributor to job creation, capital investment, and national pride of any tourist destination. According to my research, no study on investment barriers to investment by black entrepreneurs in the South African hotel industry has been conducted. This study breaks new ground in terms of expanding research about the hotel industry and the participation of black entrepreneurs in the industry, to, ultimately create new pathways to attract black-owned capital to the South African hotel industry..