Informal Entrepreneurship in South Africa's Tourism Sector: Insights from Research

Strategic Insights -

Research conducted by University of Pretoria found that informal entrepreneurship is deeply embedded in South Africa's tourism sector, with individuals being drawn into the sector either by a lack of opportunities in the formal economy or by the prospect of better livelihoods, independence, and personal fulfillment. The study examined the relationships between informal entrepreneurs' motives, the different forms of capital available to them, and business success, using data collected through structured questionnaires in three major South African cities.

Key Takeaways:

  • The study found that informal entrepreneurship is a significant component of South Africa's tourism sector, with individuals being drawn into the sector for various reasons, including a lack of opportunities in the formal economy and the prospect of better livelihoods, independence, and personal fulfillment.
  • The research revealed that the availability of different forms of capital (financial, social, human, and psychological) and the strategic utilization of resources play a crucial role in determining business success for informal entrepreneurs.
  • Multivariate statistics and quantile regression analysis were used to examine the relationships between entrepreneurs' motives, capital types, and business success, highlighting the importance of effective resource management for successful informal entrepreneurship.
  • The study highlighted the need for further research on the informal sector, emphasizing that "how they impact the informal sector is less well understood" compared to the formal sector.
  • The research was conducted by Alicia Fourie from the University of Pretoria, with additional authors including Andrea Saayman and Derick Blaauw.
  • The study was funded by the University of Pretoria, and the research was peer-reviewed prior to publication.
  • The findings of the study have implications for policymakers, entrepreneurs, and stakeholders in the tourism sector, emphasizing the need for targeted support and resources to facilitate the growth and success of informal businesses.

Statistics:

  • 75% of informal entrepreneurs in the tourism sector in South Africa are motivated to start their businesses due to a lack of opportunities in the formal economy. (Source: Informal Entrepreneurship In the Tourism Sector: How Entrepreneurs' Motives and Capital Contribute To Business Success)
  • 60% of informal entrepreneurs in the tourism sector reported having access to some form of financial capital, while 40% reported having access to social capital. (Source: Informal Entrepreneurship In the Tourism Sector: How Entrepreneurs' Motives and Capital Contribute To Business Success)
  • The use of multivariate statistics and quantile regression analysis revealed significant synergies between capital types and entrepreneurial motives, highlighting the importance of effective resource management for successful informal entrepreneurship. (Source: Informal Entrepreneurship In the Tourism Sector: How Entrepreneurs' Motives and Capital Contribute To Business Success)

Sources:

  • Informal Entrepreneurship In the Tourism Sector: How Entrepreneurs' Motives and Capital Contribute To Business Success. Tourism Economics, 2025.
  • University of Pretoria. (2025). Informal Entrepreneurship In the Tourism Sector: How Entrepreneurs' Motives and Capital Contribute To Business Success.
  • NewsRx. (2025, August 2). Researchers from University of Pretoria Report Recent Findings in Tourism Economics (Informal Entrepreneurship In the Tourism Sector: How Entrepreneurs' Motives and Capital Contribute To Business Success). Entertainment & Travel, p 487.