OWNERS of ungraded accommodation facilities stand to lose business following government's decision to use only graded accommodation amenities from January next year.

As SA gears up for the 2010 Soccer World Cup, lack of graded accommodation has emerged as one of the key challenges facing the tourism industry.

The new procurement policy is likely to squeeze the margins of businesses that rely on government employees and politicians travelling on official business and government retreats.

Salifou Siddo, the Tourism Grading Council of SA's executive director, said yesterday that 44% of all accommodation rooms in SA were graded. About 55% of hotel rooms were graded, while the figure for guesthouses, bed-and- breakfast facilities and country houses was 68%.

The subsector with the least graded rooms was game lodges, with 24% of rooms graded.

"We are delighted with the government announcement. It is going to encourage those who are still outside the process to get on board," said Siddo. "This procurement policy will reward those businesses that have taken the initiative, and encourage those still outside the process. This is not a form of punishment."

Siddo said the council would soon conduct grading exercises in subsectors such as the conferences and conventions centres.

Announcing the policy changes at the third annual tourism conference in Midrand yesterday , Environmental Affairs and Tourism Minister Marthinus van Schalkwyk said the move was aimed at boosting quality assurance and standards in the tourism industry.

He said government had so far chosen not to use legislation against ungraded facilities. Grading is currently voluntary.

"Legislating a compulsory grading system will only be used as a last resort if the voluntary system does not achieve its targets," Van Schalkwyk said.

He said the cabinet had approved the proposal, which comes into effect from January 1 next year. The changes would initially apply to national government departments.

Van Schalkwyk said provincial government departments were keen to apply the same approach. "We will also meet with Salga (the South African Local Government Association)," he said.

Tourism Business Council of SA executive director Tanya Abrahamse said most enterprises in the tourism industry were eager to be graded.

"It was the (tourism) industry which asked for the grading," she said yesterday.

The two-day conference, which ended yesterday, was also aimed at preparing the tourism industry for the world cup.

In his presentation , 2010 Bid Company CEO Danny Jordaan said the economic effect of the world cup tournaments in France, South Korea and Japan should inform SA's strategies .

He said the industry should develop a tourism development plan going forward.

Meanwhile, Van Schalkwyk urged white tourism businesses to embrace black economic empowerment .

"The white industry should not see empowerment as a threat, but as an opportunity to empower those previously excluded."

Discussions at the conference also included concerns about road and air access, public transport and perceptions about safety for world cup visitors.