Key Differences Between the Tourism Sector Codes and the Generic Codes of Good Practice

The Amended Tourism Sector Code No. 39430 has been in effect since 20 November 2015, becoming the first sector code to align with the Department of Trade and Industry’s (DTI) Amended Codes of Good Practice. This blog will highlight the key differences between the Tourism Sector Codes and the Generic Codes of Good Practice.

Scope of Application

The Generic Codes of Good Practice apply to all sectors unless a specific sector code, such as the Tourism Sector Code, governs them. The Tourism Sector Codes apply to businesses involved in:

• Accommodation
• Hospitality & Related Services
• Travel & Related Services

Companies operating within this scope must adhere to the unique requirements of the Tourism Sector Codes, which are designed to meet the needs of the industry.

Qualification Requirements for EME, QSE, and Generic Enterprises

There are significant differences in the turnover thresholds used to classify Exempted Micro Enterprises (EMEs), Qualifying Small Enterprises (QSEs), and Generic Enterprises in the Tourism Sector Codes and the Generic Codes.

• Tourism Sector Codes:some text
  • EMEs: Enterprises with an annual revenue of R5 million or less.
  • QSEs: Enterprises with an annual revenue between R5 million and R45 million.
  • Generic Enterprises: Enterprises with an annual revenue exceeding R45 million.
• Generic Codes of Good Practice:some text
  • EMEs: Enterprises with an annual revenue of R10 million or less.
  • QSEs: Enterprises with an annual revenue between R10 million and R50 million.
  • Generic Enterprises: Enterprises with an annual revenue exceeding R50 million.

This means that the Tourism Sector Codes enforce stricter turnover thresholds for classification, particularly for EMEs and QSEs.

Ownership

The ownership compliance targets differ between the two codes.

• Tourism Sector Codes:some text
  • 30% for Exercisable Voting Rights and Economic Interest held by Black People.
  • 15% for Black Women.
  • 10% for Black New Entrants.
• Generic Codes:some text
  • 25% + 1 vote for Exercisable Voting Rights.
  • 25% for Economic Interest held by Black People.
  • 10% for Black Women.
  • 2% for Black New Entrants.

Employment of Black Disabled People

The Tourism Sector Codes emphasize the employment of black disabled individuals more strongly than the Generic Codes. While both set a 2% compliance target for black disabled employees, the Tourism Sector Codes offer additional incentives. If a company employs black disabled individuals as 3% or more of its workforce, it can earn 2 bonus points, allowing it to score up to 4 points on the Management Scorecard.

Skills Development Spend

The Tourism Sector Codes place specific focus on sector-related training programs. Tourism companies must invest in skills development programs that are directly related to:

• Accommodation
• Hospitality & Related Services
• Travel & Related Services

In contrast, the Generic Codes do not impose restrictions on the types of training programs that companies can support. However, tourism companies must align their skills development spend with sector-related needs.

Enterprise and Supplier Development Benefit Factor Matrix

The Enterprise and Supplier Development Benefit Factor Matrix also varies between the Tourism Sector Codes and the Generic Codes. For example, the Tourism Sector Codes have lower contribution percentages in some areas than the Generic Codes. One notable difference is in the recognition of minority investments in Enterprise Development and Supplier Development beneficiaries:

• Tourism Sector Codes: Cap recognition of the investment amount at 70%.
• Generic Codes: Allow for 100% recognition of such investments.

Conclusion

In summary, the Tourism Sector Codes impose more industry-specific requirements than the Generic Codes. Differences in turnover thresholds, a focus on sector-specific skills development, and a stronger emphasis on employing black disabled individuals demonstrate the unique focus of the Tourism Sector Codes.

For more information or assistance navigating the Tourism Sector Codes, feel free to reach out to Elevate Advisory Partners for expert guidance.