Tourism: Minister's Budget Speech
19 Apr 2011
Budget vote speech of Department of Tourism, delivered by Mr Marthinus van Schalkwyk, Minister of Tourism, Parliament, Cape Town
20 Apr 2011
We look back on a year during which our country and particularly our tourism industry not only experienced the phenomenal success of hosting the World Cup, but also launched our tourism vision for 2020. As a country, we had the world’s eyes on us prior to the hosting of the tournament. To the credit of the entire nation, we were able to showcase the best we have to offer in the true African spirit of generosity, sharing and ubuntu.
As the tourism sector, we have consistently focussed on leveraging the success of the World Cup towards new, shared and green growth. Tourism’s position as a sector which contributes significantly to our country’s goals has been duly recognised with its inclusion as one of the six key growth pillars of the economy.
The National Department of Tourism (NDT) and the entire tourism industry in South Africa have taken great strides in terms of repositioning tourism and placing the necessary policy framework in place to ensure new and shared growth.
I would like to take this opportunity to share with you our vision in more detail and I will do so around three themes, namely new growth, shared growth and green growth.
New growth in tourism
One of the most important building blocks we have put in place as part of our new growth plans has been the first ever National Tourism Sector Strategy (NTSS), which was approved by Cabinet on 2 March.
Chairperson, this ambitious strategy represents our commitment to intelligent planning and policy formulation. It was developed over a two year period in close collaboration with local and provincial government, an advisory panel of top industry minds, representatives of a variety of professional bodies, academia, tourism marketing agencies, civil society and the broader public.
The NTSS is a document that the entire sector is committed to. We have worked hard to ensure that our ambitious targets are coordinated and credible. The strategy rests on three pillars, namely driving the tourism economy, enhancing visitor experiences and ensuring sustainability and good governance in the industry.
We aim to increase the number of foreign tourist arrivals to South Africa from 7 million in 2009 to 15 million by 2020, tourism’s total contribution to the economy from R189 billion in 2009 to R499 billion by 2020, the number of domestic tourists from 14.6 million in 2009 to 18 million by 2020 and to create 225 000 new jobs by 2020.
To better streamline and align our efforts, our department has also undertaken a review of current tourism legislation. The Tourism Act of 1993 predates our democracy and will not facilitate the growth we have in mind. We intend to table a Tourism Bill in parliament before the end of the financial year and we look forward to constructive interaction with members as we enrich it.
We will also be fostering new growth by accessing markets unlocked by the World Cup. In this context, we envisage maximising the value of our participation in a number of international and regional tourism platforms. We will seek cooperation with especially African partners in order to contribute to the economic prosperity of our continent through tourism. The NDT will also develop a Tourism International Relations Strategy to tactically guide our engagements at multi-lateral level, including our participation in the BRICS formation.
We understand that our traditional markets in North America and Europe will remain important, particularly in terms of arrivals and spend, and these markets will certainly not be neglected. We will also aggressively pursue the long term growth opportunities in amongst others China, India, South America and our own continent.
In terms of hedging against risks such as economic downturns, higher oil prices and currency volatility we are carefully rebalancing our portfolio and reviewing our market segmentation and understanding of the required product diversification. This includes the mix of international, regional and domestic tourists, the spread between high-value and middle-value markets and the blend of leisure, business and events tourism.
One important component of this approach is our increased focus on meetings, incentive trips, conferences and events. Business tourism has become a significant growth driver worldwide, sparking intense competition between cities and countries.
We understand that well coordinated bidding mechanisms are required if a destination is to succeed in this competitive environment and we will this year establish a National Convention Bureau under the auspices of South African Tourism (SAT).
Another important component of our focus on new growth is air access. Prior to Cabinet’s approval of a five year Airlift Strategy in 2006, only about 20 airlines operated to our destination. Five years later more than 50 airlines, making around 230 000 aircraft landings, and carrying about 33 million passengers a year, move through South Africa's ten principal airports.
As a country we understand that we must avoid a silo approach to tourism and aviation planning. Greater convergence can in future be expected between tourism marketing plans, the role of the national carrier and priorities for international negotiations on flight routes and frequencies.
As a government, we continually reiterate our commitment to the enhanced implementation of the 2006 Airlift Strategy decision, which is aimed at the phased liberalisation of our air space with a view to boosting trade, tourism growth and our national development objectives.
The tourism sector therefore also welcomes the planned launch by South African Airways of a non-stop service to New York in May 2011 and a direct service to China towards the end of 2011, as well as Air France’s planned launch of a new thrice weekly non- stop service from Paris to Cape Town in November 2011.
Shared growth in tourism
The tourism sector is not only a multi-faceted industry that contributes to economic growth on many levels, but it is also a labour intensive industry with a significant capacity for creating jobs.
This is particularly true in terms of job creation in rural areas, as well as amongst women and the youth. In addition to contributing to an environment which is conducive to the creation of decent and sustainable jobs, the NDT will contribute 10 270 full time equivalent jobs in the current financial year through its Social Responsibility Implementation (SRI) programme and the Tourism Enterprise Partnership (TEP).
The sector is also fertile environment for entrepreneurs and small, medium and micro enterprises (SMMEs). We will continue our partnership with the Business Trust to fund the TEP – a programme that will support about 530 small rural enterprises in this financial year.
In terms of its economic empowerment goals, the NDT will spend R253 million in the current financial year to fund tourism projects that are aligned to the Expanded Public Works Programme. We believe this will assist with the transfer of wealth to poor and rural communities by amongst others ensuring ownership of assets and the facilitation of skills development.
Green growth in tourism
Chairperson, let me turn to the third theme:the interface between travel and tourism and the green economy. The entire tourism value chain will have to contribute its fair share to our country’s Copenhagen commitments on climate change. This presents challenges to our industry, but also a myriad of opportunities.
On the one hand, tourism is vulnerable to the impacts of climate change, and on the other, it contributes to the problem.
Like other economic sectors, our sector must mitigate climate change by reducing its growing carbon footprint – and we must do so in a measurable, reportable and verifiable manner.
Let me stress: carbon offsetting is not enough – we need to fundamentally change the way the tourism sector operates in a carbon constrained world.
The risk of a ‘do nothing’ approach is that we will be burdened with stranded assets in 20 years, or less, from now. Fortunately, the required transition holds opportunities for new green jobs, green entrepreneurs and green investment. A green revolution in the tourism sector could also be a catalyst for green growth in the broader economy, given its labour intensity and the multiplier effect that cascades through the entire economy.
In terms of responsible and low carbon tourism, I am concerned about the lack of harmonisation of accreditation, certification and labelling in our industry. There are some very admirable private sector and civil society driven efforts that have created systems of integrity. But these are in silos, and should find broader application.
This regulatory vacuum in terms of the tourism sector unfortunately creates the space for abuse and green-washing. It also does not properly reward those in the industry that do play leadership roles by investing in low carbon, ethical, clean and green tourism transformation.
If a facility states that it is carbon neutral or committed to responsible tourism, we need to know that they apply a minimum standard that we can trust, and that our visitors can trust. It is about the integrity and reliability of destination South Africa.
We will therefore publish the National Minimum Standard for Responsible Tourism in the current financial year. These standards will deal with various dimensions of green and responsible tourism including biodiversity conservation, energy consumption and water use, proper waste management and mitigating greenhouse gas emissions. I trust it will establish the much needed minimum criteria for responsible tourism and a transparent national accreditation process for sustainable tourism certification.
But that is only the first step. I would like us to work towards a system that will see government, the private sector and civil society taking hands and building on international and local best practice.
That balance will have to be between self-regulation and a national system of integrity, transparency and accountability that will foster public trust and that could serve as a benchmark. And we need firewalls: the same stakeholders cannot develop standards, be accredited certifiers, receive such certification and monitor compliance.
Chairperson, our department realises that green growth in tourism is not a nice to have, but a must-have. I am convinced that a collaborative effort will help us to close the space that exists for green-washing and remove the confusion about what is credible and what not. Together we can move tourism’s green and social conscience from being a hyped concept to inspiring a paradigm shift.
In conclusion, I would like to thank our Deputy Minister, Ms Tokozile Xasa, for her commitment to the portfolio and for sharing this journey with me and the NDT.
Thank you also to the Director-General, Mr Kingsley Makhubela, and his enthusiastic and capable team for bringing our new department so far in a very short time. Mr Makhubela, thank you for your strong leadership and vision.
I would also like to express my appreciation to the board and leadership of SAT for helping us to leverage the World Cup to lift tourism to new heights. My gratitude also goes to the board and leadership of TEP for our excellent partnership. We look forward to working with you as we explore new frontiers for growth.
A thank you would not be complete without expressing the gratitude of our department towards the private sector for the constructive relationship we enjoy.
Thank you to all our partners for engaging with us and for your commitment to our shared goals.
Chairperson, I understand there are high expectations for the tourism sector. I have faith that, as a united front, we will be able to meet and exceed these expectations.
I thank you.
Issued by: Department of Tourism
20 Apr 2011
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