Poverty reduction is a central component of South African government local economic development (LED) programmes. The Grahamstown Kwame Makana pilot project for promotion of tourism homestays aims to assist disadvantaged women to become self-reliant entrepreneurs. However the project has only met with partial success. This paper uses an emotional intelligence (EI) methodology to assess the empowerment and confidence levels of the women. The major findings are: a) the home-stays are lacking entrepreneurial steering, reflected by absence of marketing strategies and a heavy reliance on one distribution channel; b) a majority (74.3%) scored low on self and social awareness, self-management and social skills. The paper argues that disadvantaged groups with low emotional confidence levels will struggle to capitalize on opportunities for economic advancement. It concludes that in order to achieve LED, and hence poverty reduction, through tourism home-stays there is a need to focus on building confidence and empowerment of the women.