The Tourism and Hospitality industry continues to make a significant contribution to the development of the South African economy. Traditionally, there has been a growing demand for holiday properties such as Bed and Breakfast (B&Bs) operations. Since 1994 and the advent of democracy, the national government of South Africa has implemented a range of national support programmes that are designed to assist with the development of entrepreneurship and lead to the upgrading of small, medium and

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... ro enterprises (SMMEs). The National Arts Festival in Grahamstown is one of the three largest festivals held in South Africa. Festivals and events are used to boost tourism, since tourists and visitors spend large amounts at festivals on a wide variety of products and services such as accommodation, restaurants, shows, curios and transportation. As such, the purpose of this paper is to evaluate in a limited scope, the economic impact of the National Arts Festival (NAF) on B&Bs in a case study of Grahamstown, Joza Location. The objectives of the study were thus to investigate the positive and negative impacts of the National Arts Festival on Grahamstown accommodation such as B&Bs to investigate the impact on the economic development of Makana Municipality; and also to assess the local government involvement in businesses so as to ensure that Grahamstown attracts more tourists. The results indicate that owners of the B&Bs perceived the economic effect of the NAF to be relatively high on their agenda. It is recommended that the government be more involved with these businesses in order to improve the economy of the city. Furthermore, they need to continuously up-skill and train the owners of establishments, market the B&Bs and assist in funding so as to ensure good co-existence in economic efficacy of the B&Bs at the Joza location which is situated in Grahamstown, South Africa.