Star grading with the TGCSA: what it involves
What TGCSA star grading involves for a South African guesthouse or small hotel, from levels and accolades to budgeting the upgrades grading asks for.
By Achekam · · 4 min read · For Hospitality businesses in South Africa
Guests booking a South African guesthouse often filter by stars before they look at photographs. Tour operators ask for the grade on their contracting forms. And the owner of a growing establishment eventually wonders whether the next star is worth what it will take to earn it: new bathrooms, better linen, a proper reception area.
The Tourism Grading Council of South Africa (TGCSA) runs the country's star grading. This piece explains what its grading involves for a guesthouse, lodge or small hotel, and how to plan and record the spending that a higher grade usually demands.
Criteria with a long history and a recent revision
The TGCSA says its grading criteria were introduced in 2002 and were most recently revised with effect from 1 April 2019. It describes them as following quantitative and qualitative core requirements and quality standards.
That mix matters when you prepare. Quantitative requirements are things an assessor can count or measure: facilities present, services offered. Qualitative standards are about condition and quality: how the room is maintained, how the service feels. A property can tick every box on the first kind and still lose a star on the second, which is why maintenance and housekeeping standards deserve as much attention as new facilities.
Read the criteria for your category in full before planning anything. The TGCSA publishes them, and they are the only reliable guide to what your assessor will look for.
Star levels, 5 Star Premium and the newer categories
The TGCSA's star grading runs from 1 to 5 Stars, augmented by a 5 Star "Premium" level reserved for the most luxurious product offerings in the country.
The revised system also changed the categories properties are graded in. It added three categories for Small Hotels, Boutique Hotels and Apartment Hotels, and renamed the former Meetings, Exhibitions and Special Events Centres (MESE) category as VENUES. If your property has changed shape since it was first graded, for example a guesthouse that now runs as a small hotel, check that you are being assessed in the category that fits what you are today. The category decides which criteria apply.
Accolades for niche markets
Beyond stars, the TGCSA has added seventeen (17) accolade categories for niche markets and services, such as Wedding Venue, Cycling Tourism, Birding and Family Friendly. A graded establishment typically has to meet a minimum number of requirements to earn an accolade.
For a small property, an accolade can be a cheaper way to stand out than another star. A country guesthouse popular with birders, or a farm venue that hosts weddings most weekends in season, may find that the accolade matches its market better than the extra facilities a higher star would need. Look at the accolade requirements alongside the star criteria before deciding where to spend.
Budgeting the upgrades grading asks for
Once you know what the next grade or accolade requires, turn it into a budget. In Achekam a business can set a budget per account and period and compare it with actual figures from its ledger. A grading budget might have:
- a capital line for each upgrade project, such as bathroom refits or new bedroom furniture, in the months the work is planned;
- an expense line for smaller items that will not be assets, such as new linen sets and towels;
- an expense line for the costs of the grading process itself.
Then watch commitments, not just payments. Approved purchase orders count as committed spend against budgets per expense account and period, and the screen shows budget, spent, committed and available for each line, flagging over-committed lines without blocking a purchase. In a refit, the danger is not the invoice you have paid; it is the orders you have approved and not yet received. Seeing committed spend against the budget stops a project quietly running over before the bills arrive.
Time the work for the quiet season if you can, and plan the cash for it alongside the low-season dip; cash planning for the low season works through that.
Putting new furniture and equipment on the register
Most of what a grading upgrade buys is a fixed asset: furniture, fittings, kitchen equipment, televisions. Achekam's fixed-asset register lets a business add assets at cost, depreciate them monthly by straight line or reducing balance with a journal each month, and dispose of them with the profit or loss posted.
Two practical points. When an upgrade replaces old furniture, dispose of the old items in the register at the same time as you add the new ones, or the register will carry both. And note the register's limits: it does not work out tax wear-and-tear, and it is not part of Business Essentials, so check that your plan includes it. Whether a particular piece of work is an asset or a repair is worked through in refurbishment: asset or repair.
Before the assessor arrives
- Read the criteria for your category and mark each one met, partly met or missing.
- Price the gaps, and decide which are worth closing now.
- Look at the accolades that fit your guests.
- Set the budget, watch commitments, and record each new asset as it arrives.
- Fix the small maintenance items, which the qualitative standards will notice.
The TGCSA's grading criteria page explains the criteria it uses to award star grades, the categories and the accolades.
Start with the criteria and an honest walk round your own property. The upgrade list that comes out of it is your budget, and the budget tells you whether the next star is worth it.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
