Page 131 - Risk Report 2024

7. Energy 8. Logistics

Frequent power outages disrupt operations and increase costs, The sector relies on reliable transport and logistics nodes,
as businesses invest in alternative energy and backup systems services, and infrastructure to function, making it vulnerable
at significant expense (particularly in diesel consumption) to disruptions. Any compromise in the transport and travel
which cannot be readily transferred to the consumer. These system could halt operations. Although most operational
investments contribute toward sustainability and improved goods and services can be locally procured, imported goods
marketing capabilities, with a view to contribute back to the (e.g. electronics, chips, and generator spare parts) are often
national grid in future. delayed due to geopolitical tensions and the failure of SAs
ports. Many businesses stockpile spare parts and high demand
goods in response. The sector diversifies transport options and
collaborates with service providers and Government to improve
resilience.

9. Food Security 10. Climate Change
The risk impacts the sector financially through price increases Climate change induced extreme weather deters tourists, and
and inaccessibility but opens opportunities for experimentation is catastrophic, particularly for smaller entities and those
with local cuisine and food systems, promoting culinary tourism isolated or located in flood or drought prone areas. Hotels and
experiences, and ensuring food safety standards. Collaboration restaurants suffer damage or restrictive access to property,
with local farmers, food producers, and Government addresses or guests that are ‘locked-in’ during emergencies. Emergency
food security challenges. Restriction of locally produced food preparedness and BCPs are essential to respond and recover
and goods will reduce trading sustainability for food and (including partnering with local authorities and disaster
drink establishments by affecting operating hours, temporary management services). Transitioning to a low-carbon economy
and/or permanent closures, with resultant unemployment requires significant changes in the sector. Investors in larger
consequences, and reduced revenue contribution to the entities increasingly focus on ESG and prioritise sustainable
national fiscus. business solutions. Entities invest in mitigation and adaptation
(e.g. greenhouse gas emission reduction and climate-
resilience), which increase attractiveness as eco-friendly
tourism destinations, and collaborate with local communities,
environmental organisations, and Government.

11. Technology 12. Skills

Cyber security affects the sector as technology becomes more The sector is attractive for first time employment seekers, relying
integrated into tourism operations, especially with regards heavily on lower skilled and labour-intensive resources, with
to personal information breaches, ransom demands, POPIA operators upskilling staff. While not a major risk yet, attraction
non-compliance, business interruptions, financial losses, and and retention of staff is a priority, and the labour market is
reputation damage. AI is a significant opportunity, particularly increasingly competitive, particularly for highly specialised
for personalisation of the hospitality experience, but the risks skills. The regular amendments to the Sectoral Determination
are not yet understood sufficiently to implement ethically. for the hospitality sector have direct implications for staff
The sector invests in costly employee training, internal benefits at small hospitality businesses, especially affecting
control improvements, cybersecurity, innovative technologies, skills development in rural areas with limited access to external
insurance (offering limited protection), and contingencies to training opportunities. The sector invests in skills development
mitigate the risk, while collaborating with technology providers, and collaboration with educational institutions, vocational
cyber experts, and Government agencies to enhance resilience. training centres, and government agencies to mitigate the
risk. Economic growth and improving SA’s attractiveness as a
destination will unlock the sector’s contribution to employment
and social security.