A case study on reporting the local economic benefit of community-owned lodges and a government-owned hotel. Three pilot studies have been developed to test a methodology for reporting local economic benefit as part of the audited accounts of accommodation providers. The pilot was undertaken in !Xaus Lodge, Witsieshoek Mountain Lodge in South Africa and Piggs Peak in Eswatini.
This is a case study for Witsieshoek, one of three showing the evolution of the methodology.
WITSIESHOEK – AN INTRODUCTION
Witsieshoek Mountain Lodge is owned by the Batlokoa Community of Tseseng, Phuthaditjhaba and operated on their behalf by Transfrontier Parks Destinations (TFPD), a tourism partner experienced in community-owned lodges. Witsieshoek Mountain Lodge is situated in the Maloti Drakensberg Transfrontier Conservation Area at the foot of the magnificent Sentinel Peak and looks across to the Drakensberg Mountains Mont-Aux-Sources and Amphitheatre. It’s the trailhead for the Sentinel Peak Hike which is the access to the top of Tugela Falls – the highest waterfall in the world.
Witsieshoek Mountain Lodge is the commercial asset of a remote rural community that has few sustainable opportunities to build its local economy. While rural and mountain tourism is not unique as a development model, what makes the Witsieshoek story special is the Responsible Tourism financial data that quantifies the economic impact of this Lodge on the local community.
Witsieshoek differs from mainstream tourism operations in that the Lodge is owned by the local Batlokoa community, part of the greater Sesotho nation, and is operated through a partnership with a commercial operator (Transfrontier Parks Destinations – TFPD).
The footprint for today’s Witsieshoek Mountain Lodge was built in the early 1970s. Successive government & private agencies used the facilities to generate commercial incomes, and after a successful land-claim settlement post-1994 the Lodge was handed over to the Batlokoa, but not the skills and resources to do so effectively. Thus, the Lodge slipped into disrepair. By 2010 Witsieshoek Mountain Lodge was ”derelict – beyond your wildest dreams derelict” as CEO of TFPD, Glynn O’Leary once explained. The back story of the relationship between the Batlokoa and TFPD is available here.
Witsieshoek was about to be closed by its community owners, the Sesotho Batlokoa, when TFPD was awarded the concession to manage and market the property in 2010. Since re-opening in 2010, Witsieshoek has tracked the local economic benefit created by the Lodge and reported its Regional Economic Benefit.
When the Batlokoa Community owners decided to bring in a commercial partner, they understood the need to connect with those who operate with a philosophy that prioritizes mutual respect and fairness to all. Having community and operator able to connect beyond the balance sheet is what makes this a true Responsible Tourism operation. When asked to explain the impact of Witsieshoek, Ezekiel Kopane’s story is often told. Ezekiel was a waiter at the Lodge and had been there through the period when salaries were paid intermittently. A few years after TFPD started operating he explained “Before, my children would go to school hungry and were failing. Today I get my salary reliably and I can feed them. Because he can study, my eldest has now graduated and moved on to study aeronautical engineering.’
Refurbishment
During the refurbishment, a policy to buy locally was mandated. Mr. Moleti was a local cabinetmaker. He didn’t understand the quality and robustness needed for Lodge furniture. Using samples of the type of furniture needed to complement the Sotho-inspired decor, Mr. Moleti patterned suitably designed products that are the bedroom and dining room furniture today. Samples went back and forth for quality control by the Lodge before delivery, and the quality of the workmanship steadily improved. Over R1,2m was earned.
It wasn’t only new furniture-making skills that were gained. Because of the supply-chain requirements imposed by the State-funders, Witsieshoek helped Mr. Moleti’s business to list on the National Supplier Database, able to bid for any government business today. Over time the greatest impact on his business was felt due to new skills and access to a new market. The money earned was important, but the development means more.
Where the services did not exist, support was provided to upskill and capacitate local businesses. As a result, a team of local seamstresses was trained to make curtains and extended their business beyond just the clothing they had previously made. Tefo Magasane, the potter, developed a range of functional ceramics to create a unique bedside light base, as well as several unique décor items. And the local home carpet weavers not only supplied the bedside and décor rugs for Witsieshoek but were also commissioned by other Lodges managed by TFPD to provide handmade rugs. This was all over and above the government policy of local labour employment that was maximized on all low-skill workers as well as skilled and middle-management personnel with 93% of all employees originating from the surrounding local communities .
While the economic bounty of the refurbishment period came to an end in 2016 (the graph shows a sharp drop-off of local origin supply), the entrepreneurs who skilled up during this period had the resources to continue their businesses with new capacity and perspective.
Local Sourcing
Owing to its remote rural nature, “local sourcing” is defined by Witsieshoek as goods and services sourced from community and commercial businesses located within a radius of 100km’s of the lodge and includes local villages, and the towns of Phuthaditjhaba, Bethlehem, Clarens and Harrismith.
Witsieshoek is in a mountainous area with a small agricultural and manufacturing capacity. As a result, the local suppliers simply can’t produce all the goods and materials required to run a Lodge. The Responsible Tourism policy to procure from local traders does cost the Lodge some margin because whenever possible they don’t buy from the (cheaper) national supply chains.
Community Capital Account
During its loss-making rehabilitation phase the community’s benefit from the Lodge, apart from the jobs saved, the new jobs created, and local procurement, was earned through the turnover and profit percentages of 2% that are banked by the community trust, amounting to over R2,2m. But what a critical 2% it became. The Principle Traditional Leader of the Batlokoa has maintained a policy that funds earned must be invested to build a useful capital sum before any significant expenditures could be incurred. This financial prudence turned into a lifeline for the Lodge during Covid when those funds were accessed by the Lodge to keep staff paid. As of the time of writing, all Covid-era loans from the community trust have been repaid, with interest. This mature commercial relationship between the commercial operation and the community leadership is a key indicator of a sustainable and progressive business.
In the table below: 2025” reports the local economic impact for financial year of 1 July 2024 to 30 June 2025 “Total” reports the cumulative local economic impact since under TFPD’s management from 1 May 2010 to 30 June 2025
Funding:
Witsieshoek is located within the Maloti Drakensberg Transfrontier Conservation Area and has thus received the focus from the government’s exceptional Transfrontier Conservation Directorate. This support has made a huge difference to Witsieshoek. Witsieshoek Mountain Lodge has accessed both grant and commercial funding. The government invested in Witsieshoek through grants to help the revitalization of an economic asset that could generate regional economic activity. This support from the State totalled R22,0m and was critical to providing the ”lift-off” required. Significantly this has proved to be an excellent investment for the State as it has already generated more than R26,0m in taxes from a business which, but for this support, would today be abandoned infrastructure.
When the refurbishment was originally started the departments responsible for the environment and tourism were joined. Responsibilities & department names have changed over the years. For clarity, we detail the departments as they were named at the time of the grant being awarded.
Lodge infrastructure, furbishing & furnishing (grant)
Environmental support (grants)
Operational funding
In addition, it is worth mentioning that the community owners of Witsieshoek Mountain Lodge have built a capital reserve of over R1,0m with the funds earned through turnover and profit share. This reserve was made available during Covid-lockdown to help ensure the long-term survival of the Lodge. While the loan has already been paid back, had Witsieshoek needed to access commercial funding at that point, it’s possible that the operation, even if it had initially survived COVID, would have been crippled post-Covid due to the debt burden that would have been created. The Batlokoa have also invested almost R0,8m of the rental they have received in improvements to their Lodge’s infrastructure.
Enjoy this article which describes the wider work of Witsieshoek Mountain Lodge as a “beacon of hope”
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