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7. Report of the Portfolio Committee on Tourism for Budget Vote No. 33: Tourism, dated 9 July 2019
The Portfolio Committee on Tourism, having considered Budget Vote No. 33: Tourism,
together with the Strategic Plans and Annual Performance Plans of the National Department
of Tourism (Department) and the South African Tourism (SA Tourism) reports as follows:
1. Introduction
The tourism industry is a growing economic sector globally, and South Africa in particular.
Tourism is thus a sunrise sector, and the New Gold of South Africa's economy. The sector
has a wide value chain that stimulates economic activity in other sectors such as services
sector, creative and cultural industries. It is thus commendable that the President retained the
Department of Tourism during his reconfiguration of the government departments for the 6th
Administration. The Committee acknowledges the bold and ambitious target of doubling
tourism figures from 10.5 million in 2018 to 21 million by 2030.
The tourism sector has been affected by a number of factors, including policy uncertainty and
blockages that diminished tourism growth, investment and job creation. To achieve higher
and more inclusive tourism growth and job creation, the Committee will ensure the
rebranding, repositioning, and renewal of the tourism sector. The oversight work will be
driven by the ideals of radical economic transformation to ensure that the sector works for all
South Africans.
In addition, South Africa continues to confront a challenging economic environment in which
global growth is slowing and trade tensions are mounting. The 2019 Budget addresses
immediate risks to the economy and public finances and outlines measures to build the
capacity of the state and renew economic growth. The Annual Performance Plans of the
Department of Tourism and South African Tourism are cognisant of this fiscal reality and
demonstrate that the public resources will be spent wisely and in accordance with the legal
mandate to render quality tourism services.
The purpose of this document, therefore, is to table the Committee report after a close
scrutiny of the budget allocated to Vote 33: Tourism in the 2019 Estimates of National
Expenditure to ensure that it is aligned to national priorities.
1
2. The Committee Process
The Committee received and scrutinised the tourism budget allocated to Vote 33 as outlined
in the 2019 Estimates of National Expenditure (ENE) tabled by the Minister of Finance in
Parliament in June 2019. The Speaker of Parliament referred the Annual Performance Plans
of the National Department of Tourism and South African Tourism to the Committee in line
with Rule 338 of the National Assembly. The Committee then carefully examined the
Annual Performance Plans, and associated budgets of the National Department of Tourism
and South African Tourism in terms of Rule 339 of the National Assembly. As part of this
process, the Committee held budget hearings with the National Department of Tourism on 3
July 2019 and South African Tourism on 4 July 2019. The Committee is reporting on the
Annual Performance Plans and the budget allocated to the National Department of Tourism
and South African Tourism for the 2019/20 financial year in terms of Rule 340 of the
National Assembly.
3. Significance of Tourism
In South Africa, the National Development Plan (NDP) recognises tourism as one of the key
drivers of employment and economic growth. The NDP envisages the promotion of South
Africa as a tourist and business events destination. The direct economic impact of the tourism
industry has significant indirect and induced impacts. Table 1 depicts the contribution of the
sector in 2018.
Table 1: Socio-economic contribution of tourism in 2018
Economic indicator ContributionInternational arrivals 10.5 millionDirect jobs 720 000 direct jobsTotal jobs 1.5 million direct and indirect jobs accounting for 4.5 percent total
employment in South AfricaGDP – Direct contribution
R130 billion, accounting for 2.8 percent contribution to the total GDP
GDP – Total contribution R425.5 billion, accounting for 8.6 percent total contribution to the economy
Total Tourism Foreign Direct Spend (TTFDS)
R58.57 billion
Domestic Trips 13 millionTotal Direct Domestic R18.29 billion
2
Spend (TDDS)Source: Computed from UNWTO, WTTC, and SA Tourism 2019
As depicted in Table 1, the contribution of tourism to the economy is measured against
economic indicators such as direct contribution to the GDP; total contribution to the GDP;
direct contribution to employment; total contribution to employment; international tourist
arrivals; domestic holiday trips; visitor exports; and travel & tourism investments.
The international arrivals and domestic trips have a direct impact on other economic
indicators such as contributing to the GDP and job creation, and the Committee will be
conducting close oversight on these two indicators in the 2019/20 financial year.
4. Legislative and policy mandate
The following legislative, policy, and strategic frameworks constitute the ambit under which
the Department and SA Tourism execute their core functions and mandate.
4.1 Constitutional mandate
Tourism is listed in Part A of Schedule 4 of the Constitution of the Republic of South Africa
(Act 108 of 1996) as a functional area of concurrent national and provincial legislative
competence, whilst Part B of Schedule 4 lists local tourism as a local government
competency. This classifies tourism as a concurrent function, and the Constitution enjoins
the three spheres of government to perform specific functions to ensure tourism growth and
development.
4.2 Legislative mandate
At a legislative level, the Tourism Act of 2014 (Act No. 3 of 2014) enjoins the Minister of
Tourism to perform specific tasks to drive tourism policy and strategic direction. The Act
seeks to promote practising of responsible tourism for the benefit of the Republic and for the
enjoyment of all its residents and foreign visitors; provide for the effective domestic and
international marketing of South Africa as a tourist destination; promote quality tourism
products and services; promote growth in and development of the tourism sector; and
enhance cooperation and coordination between all spheres of government in developing and
managing tourism.
4.3 Policy mandate3
The mandate of the Department is premised on a number of policies at a country and sector
level. A selected number of policies on which the oversight work of the Committee is
anchored are detailed below:
4.3.1 The National Development Plan
The National Development Plan (NDP) adopted in 2012 serves as the blueprint of
government, and recognises tourism as one of the main drivers of employment and economic
growth. The target of the NDP is to create an additional 11 million jobs by 2030, and tourism
plays a huge role towards attaining that goal. With regard to the tourism sector, the NDP
envisions:
tourism as a major source of revenue and employment for the country through the
investment in infrastructure, product and service development;
rising employment, productivity and incomes as a way to ensure a long-term solution
to achieve a reduction in inequality, an improvement in living standards, and
ensuring a dignified existence for all South Africans.
Notably, the National Development Plan (NDP) does not have a specific chapter dedicated to
the tourism sector. However, the role of tourism in the NDP, and the broad overview of the
sector are directly and implicitly conjugated with various sectors in a number of chapters.
4.3.2 The New Growth Path
Tourism is acknowledged in the New Growth Path (NGP) as one of the six economic pillars
of South Africa. Tourism is recognised as a labour-intensive sector, with a wide value chain
that cuts across various economic sectors. The NGP is intended to address unemployment,
inequality and poverty in a strategy that is principally reliant on creating a significant increase
in the number of new jobs in the economy. The NGP thus envisages tourism as a vehicle to
expedite transformation and inclusive tourism growth that nurtures participation of all South
Africans in the mainstream economy.
4.3.3 The White Paper on the Development and Promotion of Tourism in South Africa
The White Paper on the Development and Promotion of Tourism in South Africa (1996)
provides the policy direction, framework and guidelines for tourism development in the
4
country. The White Paper is a pioneering policy that has provided a strong base for other
policies and the legislative framework in South Africa since the attainment of democracy in
1994. The White Paper recognises that tourism has been inadequately resourced and funded;
a myopic private sector; limited integration of local communities and previously neglected
groups into tourism; inadequate tourism education, training and awareness; inadequate
protection of the environment; poor service; lack of infrastructure, particularly in rural areas;
a ground transportation sector not geared to service tourists; lack of inclusive, effective
national, provincial and local structures for the development, management and promotion of
the tourism sector; and growing levels of crime and violence on visitors. The White Paper
comprehensively addresses sustainable tourism development in South Africa and there is no
urgent need to overhaul it.
4.3.4 The National Tourism Sector Strategy
The revised National Tourism Sector Strategy spans a period of ten years (2016 - 2026) and
is based on five strategic pillars, namely, effective marketing; facilitating ease of access; the
visitor experience; destination management; and the broad-based benefits. The vision is to be
a top world responsible tourism destination, a safe, rapidly and inclusively growing tourism
economy that leverages South Africa’s competitive edge in nature, culture and heritage,
underpinned by Ubuntu and supported by innovation and service excellence. However, some
of the issues in the NTSS cannot be addressed at a strategy level and require a legislative
review process to assist with strategy implementation. This strategy covers all the strategic
interventions needed to stimulate tourism growth in the country.
4.3.5 The 2014-2019 Medium Term Strategic Framework
The period 2019/20 is the last financial year that concluded the implementation of the 2014-
2019 Medium Term Strategic Framework (MTSF). The concluding MTSF was grounded on
the National Development Plan and had fourteen core priorities. The Department was
pursuing four as follows, namely Outcome 4: Decent employment through inclusive
economic growth; Outcome 7: Comprehensive rural development; Outcome 11: Creating a
better South Africa, and contributing to a better and safer Africa in a better world; and
Outcome 12: An efficient, effective and development-oriented public service and an
empowered, fair and inclusive citizenship.
4.3.6 The State of the Nation Address
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In the State of the Nation Address, the President outlined new seven government priorities for
the 6th Administration as follows, namely, eeconomic transformation and job creation;
education, skills and health; consolidating the social wage through reliable and quality basic
services; spatial integration, human settlements and local government; social cohesion and
safe communities; a capable, ethical and developmental state; and a better Africa and World.
These pronouncements by the President point to a need for increased collaborations amongst
various government departments, and between the public and private sector in South Africa.
The concrete oversight deliverables for the 6th Parliament will be derived from the new MTSF
to ensure that the country achieves the bold and ambitious target of attracting 21 million
arrivals by 2030.
5. The National Department of Tourism
In line with its vision of complementing the national priorities, the Department identified
objectives that would accelerate the delivery of services in the tourism sector. Table 2
outlines the strategic outcomes of the Department, as stated in the 2015/16 – 2019/20
Strategic Plan, which correlate with Government’s Outcomes.
Table 2: Strategic Outcome-Oriented Goals
Government Outcomes Strategic Outcome-Oriented Goal
Outcome 4: Decent employment through
inclusive economic growth
Improve the impact of tourism on the livelihood
of all South Africans
Outcome 7: Comprehensive rural development
and land reform
Increased contribution of tourism sector to
inclusive economic growth
Outcome 10: Environmental assets and natural
resources that are well protected and continually
enhanced
Improve levels of competitiveness and
sustainability in the sector
Outcome 11: Create a better South Africa and a
better world
Strengthen regional, African and international
collaboration and partnerships
Outcome 12: An efficient and effective, and
development orientated public service and an
empowered fair and inclusive citizenship
Achieve good corporate and cooperative
governance
Source: NDT Annual Performance Plan 2019/20
5.1 Departmental Programmes
6
The Department fulfils its mandate through four branches, namely, Programme 1:
administration; Programme 2: Tourism Research, Policy and International Relations;
Programme 3: Destination Development; and Programme 4: Tourism Sector Support
Services. These four Programmes are interwoven and work collaboratively to deliver on the
constitutional mandate of the Department. The following information provides the purpose of
each Programme and its associated activities:
5.1.1 Programme 1: Corporate Management
The purpose of Programme 1 is to provide strategic leadership, management and support
services to the Department. Sub-programmes include Ministry, Management, Corporate
Management, Financial Management, and Office Accommodation.
5.2.2 Programme 2: Tourism Research, Policy and International Relations
The purpose of Programme 2 is to enhance the strategic policy environment, monitor the
tourism sector’s performance and enables stakeholder relations. The sub-programmes for
Programme 2 are as follows:
Table 3: Programme 2 Sub-programmes
Sub-Programme PurposeTourism Research, Policy and International Relations Management
Provides strategic direction, on research, and information and knowledge management. Also manages policy development and evaluation, and promotes sector transformation and responsible tourism.
Research and Knowledge Management
Oversees tourism research, knowledge management and impact evaluation of the sector.
Policy Planning and Strategy Oversees and guides policy and strategy development for the tourism sector, and ensures the efficient and effective management of stakeholder relations.
South African Tourism Stimulates sustainable international and domestic demand for South African tourism experiences, and regulates the standard of tourism facilities and services.
International Relations and Cooperation
Drives South Africa’s interests through international relations and cooperation.
Source: NDT Annual Performance Plan 2019/20
Activities in Programme 2 include Public lecture; Tourism Research Seminar; National
Tourism Information and Monitoring System (NTIMS); Sharing best practice workshop;
7
Indaba Ministerial Session; Various reports such as ‘State of Tourism’, ‘Evaluation Report on
Incubators’, ‘NTSS Implementation Report’, ‘Bilateral Agreements’ etc.
5.2.3 Programme 3: Destination Development
Programme 3 facilitates and coordinates tourism destination development. Activities in this
Programme include Draft master plans (coastal and marine tourism); Budget resort
initiatives; Support to SANParks sites; Destination Enhancement initiatives; Working for
Tourism projects. The sub-programmes for Programme 3 are as follows:
Table 4: Programme 3 Sub-programmes
Sub-Programme PurposeDestination Development Management
Provides strategic leadership and administrative support to the programme’s activities.
Tourism Enhancement Increases the competitiveness of South Africa’s tourism industry.
Destination Planning and Investment Coordination
Ensures that tourism infrastructure supports the current and future growth of the sector.
Working for Tourism Facilitates the development of tourism infrastructure projects under the expanded public works programme through labour-intensive methods targeted at youth, women, unemployed and disabled people, and small, medium and micro enterprises.
Source: NDT Annual Performance Plan 2019/20
5.2.4 Programme 4: Tourism Sector Support Services
Programme 4 enhances transformation, increases skill levels and supports the development of
the sector to ensure that South Africa is a competitive tourism destination.
Table 5: Programme 4 Sub-programmes
Sub-Programme PurposeTourism Sector Support Services Management
Provides administrative support to the programme’s activities.
Tourism Human Resource Development
Facilitates the efficient management and implementation of human resource development initiatives for the tourism sector.
Enterprise Development and Transformation
Facilitates inclusive participation and sustainability in the tourism sector.
Tourism Incentive Programme Manages the establishment of capital and non-capital tourism incentives to promote and encourage the development and growth of the tourism sector.
Source: NDT Annual Performance Plan 2019/20
8
Activities in this programme include Enterprise development incubators; Capacity building
programmes; National Tourism Careers Expo; Tourist Guide training programmes; Tourism
Incentive Programme initiatives; Tourism Safety Programme.
6. Budget Analysis for 2019/20 financial year
The Department’s 2019/20 budget allocation amounts to R2,393 billion of which R334,4
million is allocated to fund Compensation of Employees. The Department has reduced its
personnel from 488 in 2017/18 to the current 472. National Treasury has imposed a ceiling on
Compensation of Employees over the MTEF period and the ceiling amounts are R334,4
million for 2019/20, R360,3 million for 2020/21 and R383,7 million for 2021/22. An amount
of R359,2 million is budgeted for Goods and Services, R1,554 billion for Transfers and
Subsidies and R144,6 million for the payments of Capital Assets. Table 6 reflects the
allocation of funds per programme.
Table 6: Overall Budget Allocation 2018/19 – 2021/22Tourism Budget Nominal
Rand Change
Real Rand Change
Nominal % change
Real % ChangeR million 2018/19 2019/20 2020/21 2021/22
Programme 2018/19-2019/20 2018/19-2019/20Administration 271.4 291.5 304.4 323.1 20.1 5.7 7.41% 2.10%
Tourism Research, Policy and International Relations
1 282.0 1 331.1 1 405.5 1 479.8 49.1 -16.7 3.83% -1.30%
Destination Development
401.8 463.3 495.7 530.0 61.5 38,6 15.31% 9.61%
Tourism Sector Support Services
306.7 306.8 330.5 315.7 0.1 -15,1 0.03% -4.91%
TOTAL 2 261.8 2 392.7 2 536.1 2 648.6 130.8 12.5 5.78% 0.55%Source: National Treasury ENE, 2019/20
Table 6 indicates that the overall budget allocation to the Department marginally increased by
0.55 percent in real terms from R2.3 billion in 2018/19 to R2.4 billion in 2019/20. The
Department organises its expenditure under four programmes, as follows:
Programme 1: Administration (R291.5 million);
Programme 2: Tourism Research, Policy and International Relations (R1 331.1
billion); Programme 3: Destination Development (R463.3 million); and
9
Programme 4: Tourism Sector Services (R306.8 million)
The main cost driver under this Vote is Programme 2, which consumes more than half
(approximately 56 percent) of the total Vote allocation. This is mainly due to the significant
transfer to the Department’s Entity, South African Tourism. Whilst clearly being the priority
programme of the Department, programme 2 is one of only two programmes that experienced
a decrease in real terms, the other being programme 4. The Committee considers a decrease
in these two Programmes as detrimental to achieving the Department’s policy priorities.
Another major cost driver under this Vote is Programme 3, the bulk of which the allocation
of R371,3 million goes towards the Working for Tourism Expanded Public Works
Programme. The above programme allocations are aligned with the Department’s policy
priorities aimed at marketing South Africa as a tourism destination, job creation, skills
development, destination development and transformation of the tourism sector. The
following information provides budget allocation per Programme:
6.1 Programme 1: Administration
The Programme is allocated R291,5 million in the 2019/20 financial year, which equates to
12,2 percent of the overall departmental budget.
Table 7: Programme 1 budget allocation for 2018/19-2019/20Administration Budget Nominal
Increase/
Decrease in 2019/20
Real
Increase/ in
2019/20
Nominal %
change in
2019/20
Real %
Change in
2019/20R million 2018/19 2019/20
Ministry 23.6 26.4 2.8 1.5 11.868% 6.33%
Management 2.7 3.3 0.6 0.4 22.22% 16.18%
Corporate management 172.7 180.7 8.0 -0.9 4.63% -0.54%
Financial Management 35.0 40.1 5.1 3.1 14.57% 8.91%
Office Accommodation 37.5 41.0 3.5 1.5 9.33% 3.93%
TOTAL 271.4 291.5 20.1 5.7 7.4% 2.10%
Source: National Treasury ENE 2019/20
Table 7 indicate shows that the budget allocation for Programme 1 increased by 2,1 percent
in real terms from R271,4 million in 2018/19 to R291,5 million in 2019/20. Of this amount,
R151,010 million (51,8 percent) is for Compensation of Employees. The amount allocated
for Office Accommodation for the 2019/20 financial year is R41 million. This is for the
payment of the lease for the Department’s Head Office to the Department of Public Works
and Infrastructure. There is a significant increase in allocation, by 16,18 percent in real terms,
10
for sub-programme 2. The Committee will follow-up with the Department on this increase in
allocation.
6.2 Programme 2: Tourism Research, Policy, and International Relations
The Programme receives a budget allocation of R1,331 billion for 2019/20, of which R1,254
billion is transferred to the Department’s entity, South African Tourism (SAT). This
represents 94,2 percent of the Department’s budget allocation. SAT received a baseline
budget reduction of R17,378 million in the current financial year. The remaining allocation
available for this Programme is R76,879 million, of which R46,925 million is allocated to
Compensation of Employees.
The programme objectives entail the following:
Create an enabling legislative and regulatory environment for tourism development
and growth by conducting two tourism facilitation initiatives by March 2020.
Enhance understanding and awareness of the value of tourism and its opportunities by
hosting a public lecture and annual tourism research seminar in each year over the
medium term.
Provide knowledge services to inform policy, planning and decision-making by:
o developing the national tourism information and monitoring system to collect
data from tourism sector stakeholders by March 2021.
o collecting and analysing statistics on the state of tourism by March 2021.
o developing the national tourism sector strategy implementation report, the
state of tourism report, the evaluation report on incubators in the tourism
enterprise development programme, the impact evaluation report on
departmental capacity- building programmes, and the report on the facilitation
and monitoring implementation of the signed bilateral agreements by March
2020.
Enhance regional tourism integration by:
o hosting a workshop on sharing best practices by March 2020, targeted at
African countries that have tourism agreements with South Africa.
o hosting the indaba ministerial session by March 2021.
Table 8 indicates that the budget allocation for Programme 2 decreased by 1,3 percent in real
terms from R1 282,0 billion in 2018/19 to R1 331,1billion in 2019/20. The main cost driver 11
for this sub-programme is the transfer to the Department’s entity, South African Tourism.
The budget allocation for sub-programme 1 increases significantly, by 15,82 percent in real
terms, while the allocation for sub-programme 5 decreases by 11,91 percent in real terms.
Table 8: Programme 2 budget allocation for 2018/19-2019/20Tourism Budget Nominal
Increase
/
Decrease
in
2019/20
Real
Rand
change
in
2019/20
Nominal
Percent
change in
2019/20
Real
Percent
change in
2019/20
R million 2018/19 2019/20
Sub- Programme 1: Tourism Research, Policy
and International Relations Management
8.7 10.6 1.9 1.4 21.84% 15.82%
Sub-Programme 2: Research and Knowledge
Management
26.3 28.1 1.8 04 6.84% 1.56%
Sub-Programme 3: Policy Planning and Strategy 11.7 12.9 1.2 0.6 10.26% 4.81%
Sub-Programme 4: South African Tourism 1 208.0 1 254.2 46.2 -15.8 3.82% -1.31%
Sub-Programme 5: International Relations and
Cooperation
27.3 25.3 -2.0 -3.3 -7.33% -11.91%
TOTAL 1 282.0 1 33.1 49.1 -16.7 3.8% -1.30%
Source: Adapted from ) – Vote 33 Tourism
The reasons for sub-programme 1’s budget changes might be attributed to the number of
reports that will be produced for the medium term and thus the number of consultant services
that will be procured for said projects. The Committee will follow-up with the Department as
this is as significant decrease in sub-programme 5’s allocation to check the implications for
the implementation of programme objectives over the medium term.
6.3 Programme 3: Destination Development
The budget for this Programme is R463, 297 million for 2019/20, of which R371, 344 million
(80,2 percent) is allocated to the Working for Tourism sub-programme. The Expanded Public
Works Incentive programme received a baseline budget increase of R21,153 million in
2019/20. A total of R55,831 million is allocated to Compensation of Employees for the
programme.
12
The programme objectives entail the following:
Diversify and enhance tourism offerings by:
o refining and finalising four draft master plans to support coastal and marine
tourism by March 2020.
o supporting five South African National Parks sites through the tourism
maintenance programme over the medium term.
o managing the pipeline of nationally prioritised tourism investment projects
and opportunities by March 2020.
o piloting the ownership and operational/management model and modalities to
implement budget resort initiatives in prioritised nodes by March 2020.
o implementing destination enhancement initiatives at iconic tourism sites.
Create 12 993 full-time equivalent jobs by implementing tourism projects
(Lotlamoreng Dam, Phiphidi Waterfall, Platfontein Game Farm, National Youth
Chefs training programme, one sommelier training course, youth hospitality training
and one food safety programme) through the Working for Tourism programme over
the medium term.
The sub-programmes are as follows:
Destination Development Management, provides strategic leadership and
administrative support to the programme’s activities.
Tourism Enhancement, increases the competitiveness of South Africa’s tourism
industry.
Destination Planning and Investment Coordination, ensures that tourism
infrastructure supports the current and future growth of the sector.
Working for Tourism, facilitates the development of tourism infrastructure projects
under the expanded public works programme through labour-intensive methods
targeted at youth, women, unemployed and disabled people, and small, medium and
micro enterprises.
Table 9 below reflects the allocation of funds per sub-programme:
Table 9: Programme 3 budget allocation for 2018/19-2019/20
Tourism Budget Nominal
Increase /
Real Rand
change in
Nominal
Percent
Real
Percent R million 2018/19 2019/20
13
Decrease
in 2019/20
2019/20 change in
2019/20
change in
2019/20
Sub- Programme 1: Destination
Development Management
20.3 39.0 18.7 16.8 92.12% 82.62%
Sub-Programme 2: Tourism Enhancement 19.0 23.3 4.3 3.1 22.63% 16.57%
Sub-Programme 3: Destination Planning and
Investment Coordination
27.7 29.7 2.0 0.5 7.22% 1.92%
Sub-Programme 4: Working for Tourism 334.8 371.3 36.5 18.1 10.90% 5.42%
TOTAL 401.8 463.3 61.5 38.6 15.3% 9.61%Source: Adapted from National Treasury (2019) – Vote 33 Tourism
Table 9 shows that the budget allocation for Programme 3 increased by 9.6 percent in real
terms from R401,8 million in 2018/19 to R463,3 million in 2019/20. The main cost driver
under this programme, at R371,3 million, is the Working for Tourism expanded public works
programme. This sub-programme entails various skills development programmes and tourism
projects. Through these the Department plans to create 12 993 full-time equivalent jobs over
the medium term. The budget allocation for sub-programme 1 nearly doubled, by 82,62
percent in real terms, for the MTEF period. The Department has indicated a number of
activities under this sub-programme such as: destination enhancement initiatives at iconic
tourism sites, supporting five South African National Parks sites through the tourism
maintenance programme, and refining and finalising four draft master plans to support
coastal and marine tourism among others.
The Committee noted the budget increase in this Programme and will monitor
implementation of projects.
6.4 Programme 4: Tourism Sector Support Services
The Programme is allocated R306,826 million for the 2019/20 financial year. This includes
Compensation of Employees with a budget allocation of R80,606 million and the Tourism
Incentive Programme (TIP) with a budget allocation of R189,513 million. The projects within
TIP include tourism market access, tourism grading support, tourism destination development
and energy efficient projects. The TIP experiences a baseline budget reduction of R15,396
million in 2019/20. The TIP consumes 61,77 percent of the total Programme budget and
Compensation of Employees 26, 27 percent.
The programme objectives entail the following:
14
Facilitate the development and growth of tourism enterprises to contribute to inclusive
economic growth and job creation by implementing six enterprise development
incubators by March 2020, an additional two in 2020/21 and another two in 2021/22.
Facilitate tourism capacity-building programmes by:
o training 640 chefs, 200 learners in the Blue Flag training programme, 250
Sommeliers, 1 500 Food Safety Assurers, 1 500 learners in the Hospitality Youth
programme, and 60 learners in the Resource Efficiency training programme by
March 2020.
o convening the national tourism careers expo over the medium term.
o training 20 black women at institutions of higher learning through a customised
executive development programme by March 2020.
o implementing six programmes to upskill and train tourist guides over the medium
term.
o implementing provincial and local government capacity-building programmes by
March 2022.
Accelerate the transformation of the tourism sector over the medium term by:
o implementing the Tourism Incentive Programme (market access, tourism grading,
energy efficiency, sector transformation and one additional incentive) in each
year over the medium term.
o conducting initiatives to empower women in tourism.
o providing support to tour operators through social tourism schemes.
o developing one social tourism scheme.
Ensure integrity and facilitate accurate tourism information by:
o regulating the tourist guide industry on an ongoing basis.
o managing complaints in terms of Chapter 5 of the Tourism Act (2014) over the
medium term.
o developing the tourism safety programme in collaboration with partners by March
2021.
The sub-programmes are as follows: Tourism Sector Support Services Management, provides administrative support to the
programme’s activities.
15
Tourism Human Resource Development, facilitates the efficient management and
implementation of human resource development initiatives for the tourism sector.
Enterprise Development and Transformation, facilitates inclusive participation and
sustainability in the tourism sector.
Tourism Visitor Services, ensures the integrity of information and facilitates accurate
tourism information.
Tourism Incentive Programme, manages the establishment of capital and non-capital
tourism incentives to promote and encourage the development and growth of the
tourism sector.
Table 10: Programme 4 budget allocation for 2018/18-2019/20
Source: Adapted from ) – Vote 33 Tourism
Table 10 shows that the budget allocation for Programme 4 decreases by 4,9 percent in real
terms from R306,7 million in 2018/19 to R306,8 million in 2019/20. The Tourism Incentive
Sub-Programme, at R189,5 million, is the main cost driver in this sub-programme. This
programme aims to incentivise priority areas, including providing market access support,
tourism grading support, implementation of energy efficiency initiatives and funding of
transformation initiatives in the tourism sector towards unlocking capital investment by black
tourism entrepreneurs. However, the sub-programme experiences a significant decrease in
nominal and real terms.
16
Tourism Budget Nominal
Increase /
Decrease
in 2019/20
Real
Rand
change in
2019/20
Nominal
Percent
change in
2019/20
Real
Percent
change in
2019/20
R million 2018/19 2019/20
Sub- Programme 1: Tourism Sector Support
Services Management
12.7 11.9 -0.8 -1.4 -6.30% -10.93%
Sub-Programme 2: Tourism Human Resource
Development
22.6 27.9 5.3 3.9 23.45% 17.35%
Sub-Programme 3: Enterprise Development
and Transformation
49.7 52.7 3.0 0.4 6.04% 0.79%
Sub-Programme 4: Tourism Visitor Services 22.9 24.9 2.0 0.8 8.73% 3.36%
Sub-Programme 5: Tourism Incentive
Programme
198.8 189.5 -9.3 -18.7 -4.68% -9.39%
TOTAL 306.7 306.8 0.1 -15.1 0.0% -4.91%
The decrease in this Programme will affect the implementation of the Tourism Incentive
Programme which fosters transformation in the sector. The Committee will monitor how this
decrease affects government projects aimed at inducing transformation of the industry.
7. South African Tourism
South African Tourism, through the Tourism Act (No. 3 of 2014), is mandated to market
South Africa internationally and domestically as a preferred tourism and business events
destination, ensure that tourist facilities and services are of the highest standard and monitor
and evaluate the performance of the tourism sector.
7.1 Strategic focus for South African Tourism in the 2019/20 financial year
The Entity has identified the following areas of focus for the 2019/20 financial year:
Collaboration with government departments
Strengthening partnerships with the tourism industry
“We Do Tourism” campaign
Positioning South African Tourism as a tourism and business events industry leader in
market intelligence, insights, and analytics
Implementing the Events Strategy
Drive transformation within the tourism industry through enterprise development and
supplier development
7.2 Budget Allocation 2019/20 financial year
The budget allocation for South African Tourism in the 2019/20 financial year is R1 497,9
billion, R228,4 million of which is allocated to fund Compensation of Employees. The
budget for the Entity comes from various sources as indicated in Table 11.
Table 11: The 2019/20 revenue streams for South African Tourism
Revenue 2018/19 Variance Analysis 2019/20 2020/21 2021/22
(0’000) Actual R’000 % Estimates Estimates Estimates
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NDT Allocation 1 208 048 - 0% 1 254 161 1 323 456 1 392 808
TOMSA Levies 121 516 -9 299 -7 137 356 144 224 152 156
Indaba, Meetings Africa &
other exhibitions
58 999 1 999 4% 60 192 63 503 66 996
Grading fees 21 739 -822 -4% 23 824 25 134 26 516
Sundry Revenue 37 611 16 471 78% 22 324 23 552 24 847
TOTAL 1 447 913 8 349 1% 1 497 857 1 579 869 1 663 323
Source: Adapted from South African Tourism 2019/20 Annual Performance Plan
An amount of R1 255.7 billion is budgeted for Goods and Services and R13,8 million for
Depreciation. The Entity receives 83,7 percent (R4 billion) of its projected revenue over the
MTEF period from transfers from the Department of Tourism. The amount of R137.3
million, accounting for 9 percent, comes from the Tourism Marketing South Africa
(TOMSA) Levy. The amount of R60.2 million, accounting for 7 percent comes from
INDABA and Meetings Africa. The amount of R23.8 million, accounting for 2 percent comes
from grading fees, and R22.3 million, accounting for 1 percent from sundry revenue. Table
12 indicates budget allocation to various Programmes used by the Entity to discharge its
mandate for the years 2018/19 to 2021/22
Table 12: Overall Budget Allocation 2018/19 – 2021/22SA Tourism Budget Nominal
Rand Change
Real Rand Change
Nominal % change
Real % ChangeR million 2018/19 2019/20 2020/21 2021/22
Programme 2018/19-2019/20 2018/19-2019/20Administration 132,3 135,2 140,9 148,4 2,9 - 3,8 2,19% -2,86%Business Enablement
85,9 89,7 94,7 99,7 3,8 -0,6 4,42% -0,74%
Leisure Tourism Marketing
1 026,3 1 066,6 1 130,8 1 190,5 40,3 -12,4 3,93% -1,21%
Business Events 129,3 137,7 140,9 148,4 8,4 1,6 6,50% 1,23%Visitor Experience
65,8 68,7 72,5 76,4 2,9 -0,5 4,41% -0,75%
TOTAL 1 439,6 1 497,9 1 579,8 1 663,4 58,3 -15,7 4,05% -1,09%Source: National Treasury ENE, 2019/20
For the 2019/20 financial year the budget allocations per programme are as follows:
Programme 1: Administration is R135.2 million.
Programme 2: Business Enablement is R89.7 million.
Programme 3: Leisure Tourism Marketing the is R1 066,6 billion. This
programme is the main cost driver for the Entity as its core mandate, which
entails marketing initiatives both locally and internationally.
Programme 4: Business Events is R137.7 million.
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Programme 5: Visitor Experience is R68.7 million.
Overall, as depicted in Table 10 the budget allocation to the Entity decreases by 1.1 percent
in real terms from R1 439,6 billion in 2018/19 to R1 497,9 billion in 2019/20. From the table
all but one, programme 4, programmes experienced real decreases for the medium term.
Programme 4 entails the work of the National Convention Bureau, which includes the hosting
of business events and submission and securing of event bids. The Committee will monitor
how the budget decrease will affect the international and domestic marketing campaigns
implemented by the Entity.
7.2 Expenditure Analysis for 2019/20
The following information links the budget to expenditure of SA Tourism for 2019/20
financial year.
7.2.1 International Tourist Arrivals
Global tourism trends indicated substantial growth in international tourist arrivals for the
2018 period, however the same could not be said for South Africa. South African Tourism
reported that international tourist arrivals to South Africa decreased by 0.6 percent between
April and March 2018/19 compared to the same period in 2017. Against a target of 11.2
million international tourist arrivals, only 10.4 million arrivals were reported for this period.
As part of its effort to boost international tourism, the Entity plans to transfer R751.6 million
in 2019/20 to all its international offices to focus on country-specific marketing campaigns
for the hosting of international trade-related events, customer relations management, and in-
country trade partnerships. These efforts are expected to increase international tourist arrivals
from an estimated 11.2 million in 2018/19 to an estimated 14.2 million in 2021/22, and total
international tourism revenue from an estimated R81.3 billion in 2018/19 to a projected
R118.4 billion in 2021/22. The Entity will have to capitalise on the opportunities presented
by the amended visa regulations and the Chinese and Indian source markets, to improve
international arrivals and meet its 5-in-5 strategy targets.
7.2.2 Domestic Tourism19
Domestic travel saw an improvement in performance for the period April-March 2018/19.
Domestic holiday trips accounted for 3.0 million (12.8 percent) of total domestic trips against
a target of 3.1 million. This represents an increase of 14.8 percent from the same period in
2017. The Entity plans to increase the number of local holiday trips from 3.2 million in
2018/19 to 3.6 million in 2021/22. To this end, R165.5 million has been set aside over the
medium term to entrench a culture of domestic travel among South Africans by, among other
things, devising programmes to encourage local holidaymakers to visit various destinations in
the country. Some of the challenges pertaining to domestic travel include a tough economic
climate, struggles in converting Visiting Friends and Relatives (VFR) travellers into leisure
tourists and unclear marketing campaigns. The issue of affordability continues to affect
tourism as a priority in domestic households. In addition, concerns have been raised by the
Committee about the vagueness of commissioned domestic marketing campaigns. During the
2018/19 period, domestic marketing campaigns such as Shot’ Left were vague in directing
travellers to specific destinations. The Entity is therefore faced with the opportunity of
finding innovative means of converting VFR travellers into leisure tourists and increasing
domestic holiday trips over the medium term.
7.2.3 Business Events
The number of business events hosted in South Africa increased from 125 in 2016/17 to 206
in 2017/18, with 91 740 international delegates attending business events in 2017/18. To
increase the number of delegates to 99 500 in 2021/22, and to increase the number of bids to
host events supported from an estimated 105 in 2018/19 to a projected 138 in 2021/22, R427
million has been set aside over the medium term. Business events, also referred to as the
MICE industry (meetings, incentives, conferencing and exhibitions), are a critical component
of the tourism sector. The MICE industry is a multi-billion-dollar industry that is growing
globally and is estimated to reach US$1.2 trillion by 2023. In 2017, the Entity estimated a
R2.2 billion economic contribution from this industry to the South African economy. The
industry thus poses significant opportunities for economic transformation and employment
creation. However, it is important to recognise that the growth of this industry does not solely
rest on SAT but is rather a country effort. It is critical for both the Entity and the Department
to engage with sister departments and their relevant entities (such as Home Affairs, Transport
etc.) on how best to optimise on this opportunity as a country. Issues around destination
access (e.g. visas/infrastructure/airlift), facility development, and safety require collaborative
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partnerships between key stakeholders. It is also of value for the Committee to engage with
the National Convention Bureau on their strategy for the next five years on growing the
MICE market in South Africa.
7.2.4 Quality Assurance
The Entity plans to spend R3.4 billion over the medium term to build the South African
tourism brand. Of this amount, R255.4 million is set aside in 2019/20 for electronic and print
media and marketing material, including producing above the line live footage, and public
relations and marketing campaigns. The Entity also plans to spend R220.2 million over the
MTEF period on assessor fees and training for tourism grading, seminars and workshops; and
integrated marketing and communications campaigns, which include the promotion of the
new tourism grading criteria. This is expected to increase the number of graded
establishments from 5 175 in 2018/19 to 6 100 in 2021/22. The grading of tourism facilities
and products is critical for quality assurance in the sector. At the end of the 2018/19 financial
year, the Entity had only graded 5 147 facilities against a target of 6 229.
In the 2017/18 financial year, only 5058 accommodation establishments were graded against
the targeted 5 932, resulting in only 118 497 graded rooms instead of the targeted 128 821.
The Entity cited the following as some of the reasons for the decline in membership numbers:
affordability, changing business models (from overnight rooms to long-term rentals) and
perceived lack of value of grading. The recurring under-performance under this target has
overall implications for the Tourism Grading Council’s performance in the five-year period
of 2017-2021. The Committee will continue to monitor the performance of this indicator and
the outcomes of the new grading criteria.
8. Committee observations
After a careful scrutiny and examination of the Departmental and South African Tourism
Annual Performance Plans and allocated budgets for the 2019/20 financial year, the
Committee made the following observations:
Observations with regard to the National Department of Tourism
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The Committee made the following specific observations with regard to the National
Department of Tourism:
8.1 Budget
The tourism sector has been identified as one of the economic pillars of the country with a
potential to create labour-intensive jobs. However, The Tourism Vote remains underfunded
by the National Treasury. The Department transferred R1.254 billion of its R2.392 billion to
South African Tourism, which is 53 percent of the budget appropriated to Vote 33: Tourism.
This leaves little budget for the Department to fulfil its mandate as a huge portion of the
budget is used for marketing.
In linking budget to expenditure for the 2019/20 financial year, the Committee noted the
following:
• The National Treasury has imposed a ceiling on Compensation of Employees over the
Medium-Term Expenditure Framework (MTEF). The Committee will monitor that
the Department reviews its staff establishment to stay within the Compensation of
Employees ceiling.
• There have been baseline increases for the Expanded Public Work Programme
Incentives. The implications for oversight is how the Department ensures effective
implementation of EPWP funding as this is critical for the creation of the Full-Time
Equivalent jobs.
• The Department has always struggled with the proper implementation of the Working
for Tourism Projects, particularly infrastructure projects. The Department appointed
the Government Technical Advisory Centre (GTAC) which has assisted with a
comprehensive review of its infrastructure projects. This review included an
assessment of selected individual projects as well as the internal systems for managing
these projects. The Department is now in the process of systematically implementing
these recommendations. The oversight implication for the Committee is to follow up
on the implementation process of the recommendations of GTAC.
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• There have been baseline reductions for the Tourism Incentive Programme. The
Tourism Incentive Programme is important for driving transformation programmes.
The Committee will monitor that the Department intensifies initiatives that promote
transformation and scrutinise how the Department reprioritises budget for
transformation purposes.
• There have been baseline reductions for the Tourism Incentive Programme and for
transfers to South African Tourism. The Committee will monitor all the funding
streams for SA Tourism, including contributions from the TOMSA Levy.
• The Department undertook destination planning in the 2017/18 and 2018/19 financial
year. These culminated in the destination planning manual and the Coastal and marine
Tourism Plan. The oversight implication for the Committee is to ensure that the
Department implements the Key Flagship Initiatives in Tourism Nodes as identified
for Coastal and Marine Tourism (Oceans Economy), Rural and Township areas,
upscaling through pilot projects and models. The Committee will monitor that the
department emphasises the consumption of authentic and locally produced cultural
products, events and experiences for increased tourist consumption, revenue
generation, job creation and enterprise development. These should generally focus on
the development of products of origin, enabling market access for these products,
leveraging on maintenance programmes in Parks and Heritage Sites to enhance visitor
experience.
• The department will increase the Enterprise Development Programme and
Transformation Programme. As part of this initiative, a total of 10 Incubators will be
implemented over the MTEF period. However, these are virtual platforms aimed at
facilitating the provision of remote business interventions to SMMEs in the sector.
The Committee noted that the Department has implemented at least three physical
business incubators with a capacity for walk-in type of physical interventions for
SMMEs. The virtual Incubators, will provide assistance remotely. The Department
has indicated before that the virtual Incubators are cost-effective and can provide
assistance to a variety of business types and reach a number of end users. The
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Committee will monitor the proposed virtual incubators to ascertain that they serve
the same purpose of the current method of physical in situ incubators.
• South African Tourism has projected to appropriate R4 billion, which accounts for
52.4 percent of departmental budget in the MTEF. Of this, R1.25 billion is for the
2019/20 financial year. The Committee noted that the Transfers to SA Tourism has
always been hovering around 53 percent of the departmental budget over the past 5
years. The Entity has been implementing the 5-in-5 Strategy that targets 5 million
tourists in 5 years, comprising 4 million international visitors and 1 million domestic
tourists. However, the Entity has not been able to meet its targets as projected in its
5-in-5 strategy implemented since 2017. The oversight implications for the
Committee is to ensure South African Tourism effectively implements the Super
Charge 5-in-5 turnaround strategy.
8.2 Legislative and policy environment
The Department is responsible for providing legislative, policy, and strategy direction for the
tourism industry in South Africa. The Committee noted that the Minister of Tourism had
published a Tourism Amendment Bill for public comments. The Committee agreed to
prioritise processing the Tourism Amendment Bill once it is formally tabled by the Minister
in Parliament. The Committee also noted that the sector is sufficiently covered by the 1996
White Paper on the Development and Promotion of Tourism in South Africa. However, there
are some aspects of the policy that need fresh scrutiny.
8.3 Job creation
The Committee noted the tourism industry currently contributes 720 000 direct jobs and 1.5
million indirect jobs in South Africa, equivalent to 9.2 percent of total employment. This
includes employment by hotels, travel agents, airlines and other passenger transportation
services (excluding commuter services), the activities of the restaurant and leisure industries
directly supported by tourists. At a government level, the Department will create 4331 Full
Time Equivalent jobs in the 2019/20 financial year. The Committee expressed a need for the
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Department to clearly make a distinction between the full time jobs and the job opportunities
implemented through the EPWP Programme as part of poverty alleviation.
8.4 Coordination amongst the three spheres of government
The Committee noted that the Department does not own tourism products and attractions.
The Department implements projects and programmes at a provincial and local government
level. The Committee wants a seamless coordination, collaboration and partnerships between
government departments, spheres of government, and between the government and the
private sector.
8.5 Drop out in projects implemented by the Department
The Committee noted that there are dropouts in the projects implemented by the Department,
especially in the Northern Cape. This led to the Department discontinuing the projects. This
is seen as a disservice to the people of Northern Cape and an urgent solution is needed to
address this matter.
8.6 Rural and township tourism
The Committee expressed a concern that tourism growth is still skewed in South Africa, with
the three major cities, namely, Johannesburg, Durban, and Cape Town, accruing more
benefits. The Committee views this as a consequence of the tourism development and
marketing activities that focus more on urban areas at the expense of small towns and
“dorpies”.
8.7 Nelson Mandela Capture Site
The Committee applauded the Department for finally erecting the sign directing tourists to
the Nelson Mandela Capture Site in Howick. This has been an outstanding matter for a
number of years, and the implementation of this project indicates the effectiveness of
Committee work and the inter-party collaboration in the work of the Committee.
The Committee also noted that the Howick Falls in the vicinity of the Mandela Capture Site
is in a continuous state of decline with regard to its maintenance which has led to local
businesses closing down. The Committee also noted that there is a general lack of
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maintenance in many tourism sites across the country. This needs urgent attention by the
Department.
8.8 Blue Flag Beaches
The Committee noted that some provinces, such as KwaZulu-Natal, particularly the City of
EThekwini, are struggling with enrolling beaches in their coastline in the Blue Flag Beaches
Programme. This initiative is regarded as crucial for marketing beach tourism.
Observations with regard to South African Tourism
The following observations were made with regard to South African Tourism:
8.9 Budget
It was noted that the R1.5 billion budget of South African Tourism comes from a number of
revenue sources. A big portion of this budget, amounting to R1.3 billion is an allocation from
the National Department of Tourism, and accounts for 84 percent of the Entity’s budget. The
amount of R137.4 million, accounting for 9 percent, comes from the Tourism Marketing
South Africa (TOMSA) Levy. The amount of R60.2 million, accounting for 7 percent comes
from INDABA and Meetings Africa. The amount of R23.8 million, accounting for 2 percent
comes from grading fees, and R22.3 million, accounting for 1 percent from sundry revenue.
The Committee appreciated the voluntary contribution of R 137.4 million by the private
sector trough the TOMSA Levy.
8.10 Analysis of international arrivals
The Committee noted that at least three quarters of the international arrivals come from the
SADC countries and that much of these arrivals classified as tourism is actually shopping.
This phenomenon caused the metric used to calculate international tourists to cloud the figure
of international arrivals in the country. However, the sizeable amount of the tourists spend
comes from the northern hemisphere markets. It is therefore evident that the country is
experiencing a decline in these lucrative markets that contribute a huge portion of tourism
spend to the GDP, including India and China. Given the weakness of the country’s currency,
South Africa is losing on the windfall gains that could be accruing from the tourism economy
if the core markets were growing. This needs fresh thinking in the 6 th Administration of how
South African Tourism will leverage on the core markets.
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8.11 Implementation of the 5-in-5 Strategy
The Committee noted that South African Tourism is in the third year of implementing the 5-
in-5 Strategy the Entity adopted in 2017 to drive its international and domestic marketing
activities. This is the enhanced strategy for growth, which aims to add four million more
international arrivals and one million domestic holiday trips within five years, ending in
2021. The Committee noted with concern that the Entity is struggling to meet its own targets
projected in this strategy. The underachievement in the 5-in-5 strategy pose a risk for not
achieving the 21 million arrivals by 2030 as announced by the President in the State of the
National Address. However, the Entity has developed a Super Charge 5-in-5 as a turnaround
strategy to drive arrivals. The Committee was, however, pleased to learn that South African
Tourism is currently working on a 2030 strategy that will link tourism marketing activities to
the 2030 vision of the National Development Plan.
8.12 Decrease in international arrivals
The Committee observed with concern that the International tourist arrivals to South Africa
declined by -0.6 percent, only recording 10.5 million arrivals in the 2018/19 compared to the
same period in 2017. A slight growth was recorded from Africa, Central & South America
and North America, whilst the rest of the regions recorded declines in tourist arrivals. This is
a cause for concern given that the global average performance was at 6 percent, above the
projected 4.5 percent for 2018. The Committee noted that this decline was directly linked to a
number of policy/regulatory and brand perception about the country.
8.13 Staffing
The Committee noted that the CEO of South African Tourism has been on precautionary
suspension since April 2019 without being charged. This was seen as gross mishandling of
the matter that needs urgent attention of the Minister. However, the Committee was pleased
that the Minister had instructed the Board to expedite the matter and put it to finality as soon
as possible. An undertaking was made that the matter would be finalised soon as the Board
had concluded its investigation and report was ready to be handed to the Minister. The
Committee also observed with concern that there were numerous acting positions in the
organisation, including those of the Chief Marketing Officer and the Chief Financial Officer.
It was also noted with concern that the staff morale at South African Tourism is not
conducive for maximum organisational performance.
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8.14 Transformation
The Committee noted that South African Tourism implements some transformation projects,
albeit their limited reach to rural areas and townships. It was noted that for the 2019/20
financial year, the Entity has developed an Enterprise and Supplier Development Framework
that guides its efforts in providing support for the advancement of tourism enterprises,
especially emerging black owned enterprises. The programme also assists in further
enhancement of tourism enterprises and suppliers to improve their capability to enhance
destination offerings. This was however, viewed as insufficient. A need was expressed for the
Entity to conceptualise and implement more transformation programmes targeting the rural
and urban areas.
8.15 Visa processing issues
The Committee noted challenges relating to the processing of visas, include limited in-
country capacity, delays and red tape. This is a cause for concern as these visa challenges
have caused declines in key source markets of China, India, Nigeria, Ghana, Ethiopia, and
New Zealand. In India, visa processing delays continue to be a hindrance in the minds of
Indian trade who are very cautious in taking bookings. Tourist arrivals from New Zealand
continued to decline due to worsening visa processing challenges. The Committee raised
serious concerns, particularly with India and China as these form part of the BRICS block
countries and they form a huge portion of the emerging markets globally. The Committee
noted that the ideal visa regime for South Africa is to introduce E-Visa and visa on arrival.
8.16 Safety and security concerns
The safety and security concerns were seen as one of the serious issues contributing to
declining scores on brand positivity and the number of international arrivals in South Africa.
The country experienced numerous incidents and reports of crime against tourists which
created the perception amongst international markets that South Africa is not a welcoming
destination. The negative reports led to some European governments, such as Australia,
advising their citizens about the risks of travelling to the country.
8.17 Water crisis
The Committee was concerned that the water crisis experienced in Cape Town had added to
the negative perceptions about South Africa. In most markets, the travel bookings that were
28
expected for the 2018 Easter period did not materialise. This gave advantage to the
destination’s competitors such as USA, Turkey and Kenya who gained from forward
bookings of 2018 as most consumers either changed or postponed their trips to 2019 and or
2020.
8.18 Inappropriate wildlife interaction
The Committee noted that wildlife interactions and canned hunting have negatively impacted
the country’s brand as a champion of wildlife conservation. Activists and wildlife enthusiasts
are often expressing their views on traditional and social media platforms, and most times
displaying graphic imagery of animals such as elephants, lions and other Big 5 animals
resulting in a public outcry.
8.19 Concerns about land expropriation without compensation
The Committee noted with concern that the land expropriation debate in the country was
wrongly portrayed on several social media platforms in the USA and Australia. This created
negative publicity for the destination globally. In Australia, from mid-February 2018 (post
State of the Nation Address of 16 February 2018), there was negative coverage of South
Africa on the issue. The Committee expressed an ardent opinion that this perception needs to
be managed carefully as expropriation of land without compensation is peaceful and a
constitutional debate about addressing the legacy of the past.
8.20 Domestic tourism
The Committee noted that the country continues to face challenges with regard to domestic
tourism. Of the 17.6 million domestic trips achieved in 2018, 78 percent was from Visiting
Friends and Relatives. This is the bulk of domestic trips which have not been converted into
leisure trips. The key factor affecting domestic tourism is affordability. It was also noted that
the Limpopo province is the highest in domestic tourism due to religious tourism. However,
the Committee is concerned that the Entity has no full understanding of the VFR market and
how to drive conversion of this market into domestic leisure tourism.
8.21 Implementing the Events Strategy
It was observed that South African Tourism has developed an Events Strategy that, amongst
other things, addresses, geographical spread and the reduction of seasonality in the country.
The Entity has indicated that the strategy will focus on key events countrywide that will be
29
implemented through partnerships with established event partners such as Cricket South
Africa, Standard Bank Joy of Jazz, Soweto Marathon, Cape Town Jazz Festival, and National
Arts Festival. The Committee also noted that the Entity uses these events as a hook to some
markets in the African continent, such as the Durban July that is used to attract tourists from
West Africa, including Nigeria.
8.22 Grading
The Committee observed several issues with regard to the grading system in South Africa.
These include benefits accruing to graded establishments, a decline in the number of graded
establishments in provinces such as KwaZulu-Natal, and the need for a shift in policy from a
voluntary paid system to a compulsory but free grading system.
9. Recommendations
Having made a number of observations based on the analysis of the Annual Performance
Plans and Budgets for the 2019/20 financial year, the Committee recommends that the
Minister of Tourism:
Recommendations with regard to the National Department of Tourism
9.1 Ensures that the Department and South African Tourism adopt judicious methods of
budgeting and spending the limited resources through applying effective, efficient,
and economic budgeting principles that will allow the achievement of more outcomes
with less budget.
9.2 Ensures that the Department and South African Tourism develop a strong philosophy
and adopt bias towards rural and township/Ekasi tourism when developing the 2019 -
2024 Medium-Term Expenditure Framework for the 6th Administration.
9.3 Ensures that the Department develops strategies to mitigate dropouts from the training
programmes implemented by the Department and assists provinces such as Northern
Cape to enrol an acceptable number in these programmes.
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9.4 Minister develops an awareness programme to encourage and assist aspirant and
emerging tourism entrepreneurs when they apply for funding incentives in the
Department, and follow up on those who have failed to qualify with a view to assist
them to qualify.
9.5 Minister argues the case for tourism in government and influence all her colleagues in
the Economic Cluster and other relevant government departments to collaborate on
the “We Do Tourism” campaign in making tourism a whole government approach.
This is to ensure that tourism enabling programmes and projects are reflected in the
relevant Annual Performance Plans of departments that should assist in facilitating
tourism growth.
9.6 Ensures that all the Masterplans developed by the Department under the Destination
Development Programme are timeously implemented.
9.7 The Minister prioritises tourism development in villages, small towns and dorpies to
ensure that tourism benefits accrue to these communities, especially those around key
attraction sites, for example villages surrounding National Parks.
9.8 Works with relevant organisations such as Statistics South Africa to determine the
number of villages in South Africa, the potential of tourism in each of the villages,
tourism interplay between these villages and small towns/dorpies, and state what
plans will be put in place to develop and promote tourism in all villages with the
tourism potential.
9.9 Develop a tourism entrepreneurship programme within the Department, identify
citizens with a passion for establishing tourism businesses as SMMEs, and facilitate
entrants of new business players within the mainstream tourism industry to expedite
transformation of the sector.
9.10 Strengthens intergovernmental-relations with all relevant government departments,
provinces and their tourism authorities, and municipalities, to coordinate tourism
development and marketing activities, ensure maintenance of tourism attraction sites,
and provide the Committee with a concrete implementation plan with milestones and
timeframes.
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Recommendations with regard to South African Tourism
9.11 Continues to engage the Minister of Home Affairs to introduce a fully-fledged E-Visa
and visa on arrival regime in South Africa to facilitate tourist movement.
9.12 Works closely with the Department of International Relations and Cooperation and
Brand South Africa in involving the embassies in mitigating the impact of negative
perceptions about the country abroad, and engage the Department of Police to include
places that are not affected by crime when releasing crime statistics to change the
narrative about crime in South Africa and abroad.
9.13 Involves the media houses in lobbying for a patriotic reporting on incidents taking
place on the South African soil, including balanced messages about crime, land
expropriation without compensation, drought and others to portray a positive picture
of South Africa without compromising media freedom.
9.14 South African Tourism adopts a mind shift and fresh strategies to leverage on the
weakness of the South African currency through implementing targeted marketing
campaigns in the core markets, including India and China given that these countries
only constitute a quarter of international arrivals but are the ones driving tourist spend
numbers in the country.
9.15 South Africa Tourism quantifies the effect of the barriers and perceptions of South
Africa by international markets to tourism growth, including safety and security
concerns, water crisis, inappropriate wildlife interaction, land expropriation without
compensation, visa processing issues, and others, indicating which of these are the
main drivers of negative perceptions, and provide concrete solutions to each of them.
9.16 South African Tourism provides a qualitative analysis of whether the barriers and
factors causing negative perceptions of South Africa in international markets are
under control, growing, declining or evenly spread amongst these factors, to get a feel
moving forward of what are the big drivers that affect brand positivity, and determine
a desired action, including enhanced collaboration with other Portfolio Committees
and government departments.
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9.17 Revise the policy on grading and ensure that the benefits of grading are tangible to the
graded establishments to ensure that more business enrol and stay within the grading
scheme.
9.18 Ensures that the South African Tourism Board finalises the case against the suspended
Chief Executive Officer; expedites filling positions of the Chief Marketing Officer
and the Chief Financial Officer; improve the remuneration package of the Chief
Marketing Officer to attract appropriate skills; and improves staff morale within the
Entity to drive effective domestic and international marketing within the 2019/20
financial year.
9.19 Engage Statistics South Africa to improve data collection and show inter-provincial
movement to ascertain domestic tourism movement patterns.
9.20 Conducts a study to determine the impact of currency fluctuations in the sector with a
view to develop appropriate interventions to mitigate the impact of currency
fluctuations on one hand, and maximise benefits of currency fluctuations on the other
hand.
10. Conclusion
The tourism sector will continue playing an important role in the economy of South Africa,
and the 2019/20 Annual Performance Plans for the Department and South African Tourism
have aptly captured this mandate. The Programmes, key performance indicators, projects are
all perfectly aligned to proposed budget. The budget of the Tourism Vote as presented in the
2019 Estimates of National Expenditure still shows that tourism continues to be underfunded
in the country. The Committee is however encouraged by the number of progressive projects
implemented by the Department using limited budget resources. The Minister of Tourism is
urged to seriously and carefully implement the recommendations contained in this report as
they are a game changer and a turning-point in the way the Department has been conducting
its business in the past, particularly with regard to intergovernmental coordination, tourism
entrepreneurship, rural, and township tourism. The Committee supports the budget
appropriated to Vote 33: Tourism.
Report to be considered
33
Recommended