The Broad-Based Black Economic Empowerment (B-BBEE) Act 53 of 2003 sought to redress the socioeconomic imbalances caused by South Africa’s apartheid laws. The Act included different strategies to give preference to previously disadvantaged individuals on such aspects as ownership, management, employment, enterprise development, preferential procurement, skills development and socio-economic development. This thesis does not explore the plausibility of the regulations but rather the possible gap between intended benefits and the impact of B-BBEE. It is intended to establish the administrative impact of Black Economic Empowerment (BEE) certification,1 using a case study of a medium-sized tourism enterprise. The findings of this administrative impact are juxtaposed with the policy intentions as established through policymakers. The primary question is ‘What is the administrative impact of BEE certification on tourism enterprises in South Africa?’ The main propositions are that the administrative costs of BEE certification have had a significant negative impact on the profitability and competitiveness of medium-sized tourism enterprises; that tourism enterprises are not aware of the full extent of the administrative costs of BEE certification; and that policymakers are not aware of the unintended impacts caused by BEE certification on tourism enterprises. The research was undertaken through two interrelated phases, the first of which was exploratory in nature and sought to establish the administrative impact of BEE certification through the case study organization. The second phase sought to present the findings regarding the administrative impact of BEE certification to policymakers, with the aim of establishing policymakers’ awareness of the gap between policy intentions and policy impacts. Multiple methods have been used in order to gather data that informs this thesis. Primary data was obtained through semistructured interviews. The thesis focused on a case of one medium-sized organization, which was selected using convenience sampling. An in-depth interview was conducted with the Head of Administration and Finance in the organization, as the key person responsible for overseeing the process of BEE certification. Since the thesis focuses on a single entity, the data pool was too small to allow for the generalization of findings, but sufficient for a series of in-depth explorations and assessments of the topic. Secondary data was obtained from various sources such as journals, periodicals, and reports, particularly in relation to regulatory impact assessments as well as on certification issues in the tourism sector. The main findings are that the administrative costs of BEE certification have had a minimal impact on the profitability and competitiveness of medium-sized tourism enterprises, especially from the second year of conducting the annual audits as the systems are already in place for oncoming audits. It is only about 0.01% of turnover. 1 An activity that stems from one of the regulations linked to B-BBEE Act. It is an annual certification to demonstrate the companies’ achievement as far as B-BBEE is concerned, and entails an audit process executed by South African National Accreditation System (SANAS) registered agencies. Page 3 of 3 However, the psychological burden associated with the stress of administrative preparations for audits makes it seem more costly. The tourism enterprises are unaware of the extent of the administrative costs of BEE certification in that they overestimate the cost implications by at least 75%. The policymakers are unaware of the unintended impacts caused by BEE certification on tourism enterprises, especially as they relate to the administrative costs. In conclusion, the administrative impact of BEE certification on medium-sized enterprises is minimal as far as costs are concerned; however the psychological burden, although not measurable, is substantial. Moreover, the policymakers are oblivious to any possible impacts that might have been caused by BEE certification on enterprises, thus making the gap between policy intentions and the policy impact more than it could have been had they had the awareness. Awareness at the least gives an option to rectify where possible, thus ignorance of situation can to a certain extent exacerbate the situation.