Tourism: Minister's Budget Vote Speech

Minister of Tourism, Mr Marthinus van Schalkwyk gave his Budget Vote speech on  the 3 May 2012

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Chairperson

South Africa's status as a premier global leisure destination is now firmly established. We have the capability and the means, the welcoming culture, and the varied, textured, beautiful destination that the world’s travellers ever more demanding and discerning – want when they choose a destination.
Our vision for the department is to be a catalyst for tourism growth and development in South Africa in order to crystallise the tourism mandate, our National Tourism Sector Strategy (NTSS), which we adopted exactly one year ago. Furthermore, the draft Tourism Bill has been developed as a legal framework. Public and stakeholder participation has been concluded, and the draft Bill will be introduced to Parliament during the third quarter of this year.

International tourism

Chairperson, in 1950 the world had 25 million international arrivals, in 2011 980 million, and it is estimated that in 2012, there will be 1 billion international arrivals. Within a decade, this figure is forecast to increase to 1,6 billion. International competition in the tourism market will be vigorous. Our efforts will thus require flexibility, innovation and responsiveness.

During the last five years, South Africa has outpaced the growth of all competitor locations in the leisure arrivals category. Foreign direct spend in rand terms has grown faster than arrivals, with an 11% per-annum growth rate. South Africa’s tourism industry has also managed to build on the momentum achieved during a record-breaking 2010 by growing a further 3,3% and attracting over 8,3 million international tourists in 2011.
While South Africa’s core markets in Europe and North America remain our major source of long-haul tourists, the country’s overall tourism growth in 2011 was largely due to a 14,6% growth in the emerging markets of Asia, driven by a growth of 24,3% from China and 26,2% from India. Tourist numbers were also up thanks to a 6,9% increase in arrivals from our continent.

European tourist arrivals declined by 3,5%, largely due to the ongoing impact of the global economic crisis in many countries in Europe, while North American numbers grew by 2,3% despite that continent also facing major economic challenges. 
In order for South Africa to respond favourably to, inter alia, the global challenges facing the growth and development of tourism, the department has established an International Tourism Management Branch. The objective of the branch is to provide strategic, political and policy direction for the development of South Africa’s tourism potential across various regions of the world.

This will be done working together with key departments such as the Department of International Relations and Cooperation, including the various South African diplomatic missions around the world and the departments of Home Affairs and Transport.

In this way, we hope to extend the work of the department to improve the competitiveness of South Africa's tourism industry in the global arena. The marketing of South Africa as a destination, remains the mandate of South African Tourism (SAT).
SAT currently has 128 joint marketing agreements in place across the tourism industry, with successful partnerships in our key markets. South Africa also held on to its World Cup year growth of 66,7% out of Brazil, growing by a further 0,8% in 2011. I would also like to announce that SAT plans to increase its focus on this market, opening an office in Brazil in the coming financial year.
From an African continental perspective, Nigeria and Tanzania were two of the continent’s biggest growth markets in 2011, with tourist arrivals from these two countries growing by 37,5% and 45,8% respectively. We will be investing R218 million over the next three financial years to support SAT’s efforts to grow our share of the African market. We have opened a country office in Angola, and plan to have five SAT offices open on the continent in the next five years, the second of which is set to open in Nigeria in the coming financial year.
This past financial year has also seen business tourism taking centre stage, especially in light of the establishment of our first National Conventions Bureau (NCB) as a business unit under SAT. For the next five years, South Africa has already secured over 200 international conferences, which are estimated to attract 300 000 delegates and provide an economic boost of more than R1,6 billion.
Domestic tourism
Turning to the domestic side of business, the NTSS has, among others, identified domestic tourism as a critical element not only in reaching the job creation targets set by government, but, in doing so, also developing a sustainable and reliable basis on which future tourism growth can flourish.
The Domestic Tourism Growth Strategy (DTGS) is now in place, with a clear action plan and organisational structural capacity to support implementation. This is effectively supported by a campaign "whatever you are looking for, it’s here" which we launched yesterday and will not only get South Africans to want to discover more about their own country, but will also contribute to the development of a culture of tourism and the enhancement of social cohesion among South Africans. This new domestic tourism campaign now focuses on a larger cross-section of the population.
The National Department of Tourism (NDT) has also restructured, with the Domestic Tourism Management Branch now specifically focusing on providing strategic, political and policy direction for national tourism management. During this financial year, the Tourism Empowerment Council of South Africa (TECSA), also known as the Tourism BEE Charter Council, will be appointed to monitor the implementation of the sector transformation agenda.

TECSA is tasked with monitoring the implementation of the section 9(1) gazetted Tourism BEE Charter and Scorecard in order to achieve economic transformation of the tourism sector against the sector targets.
The Tourism Grading Council of South Africa (TGCSA) has also done superb work, specifically in the past financial year. With the introduction of the new, stricter and more comprehensive grading criteria, it is most encouraging to note that the TGCSA managed to attract 1 165 new properties in the past 12 months.
Niche product development

The past financial year has also seen the department delivering on a number of key objectives relating to product development, namely the development of the Heritage and Cultural Tourism Strategy as well as the Rural Tourism Strategy. The former aims to mainstream heritage and cultural resources into the ambit of tourism, and thereby enhance the country's competitive edge as a tourist destination.

The Rural Tourism Strategy will in turn focus on ensuring a more even geographic spread of tourism, with more emphasis on supporting tourism growth in rural areas in particular, with more rural community involvement. The importance of intergovernmental relations in implementing the Rural Tourism Strategy cannot be overemphasised. However, the success of this strategy is wholly dependent on provincial and local government also playing their part.
Social responsibility implementation (SRI) projects
During the past financial year, the department exceeded its Expanded Public Works Programme (EPWP) target for full-time equivalent jobs. As part of this programme, training or skills development is critical for the tourism sector. The department has many successful SRI programmes, but I would like to mention one specific project that is very close to my heart, namely the Young Chefs training programme, which was launched and implemented last year as part of the department’s EPWP SRI initiative.

To date, 545 young persons have graduated as chefs and 120 have already been placed with established hospitality institutes, such as hotels, bed-and-breakfast establishments and restaurants. Altogether 300 of the 545 have been enrolled for second-level training, and, owing to the success of the programme, another 500 young people have been enrolled for the first time.
Small, medium and micro-sized enterprises (SMMEs)
The sector is also a fertile environment for entrepreneurs and SMMEs. We will continue collaborating with the Tourism Enterprises Partnership (TEP). TEP was successful in achieving and exceeding its performance indicators over the past year. For 2011, TEP supported 4 991 jobs created by SMMEs, which delivered an increased turnover of R454 million. This raised TEP’s overall contribution to job creation over the past ten years to more than 66 900 jobs and a turnover of over R5,3 billion.
Airlift
As a long-haul destination, we are heavily dependent on airlift capacity, particularly for the traditional and emerging markets. Recent developments in this area, such as the loss of capacity by some of our core markets, the fluctuations in the oil price and the unilateral approach taken by the European Union in the implementation of the carbon emissions trading scheme (EU-ETS), are cause for concern.

We are working with the Department of Transport and other partners to review the 2006 airlift strategy with a view to enhancing airlift capacity. We will continue to work with the international community through multilateral and other formations, to work towards progressive, fair and consensus-based schemes for a more responsible tourism approach from an air transport perspective.
Research capacity
The sustainability of our achievements also depends on our ability to plan for the future, in both the medium and long term. With constant change in the geo-political, economic, social, technological and consumer landscape, it is beneficial for us to understand how these mega-trends may affect the South African destination as well as our source markets in the future. In this regard, the Department has begun working on possible future scenarios for 2030 and what they mean for the tourism sector. This will ensure that there is no room for complacency and that there is continuous robust planning that takes the different futures into account.
Conclusion
In conclusion, I would like to take a moment to thank our Deputy Minister, Ms Tokozile Xasa, for her commitment to the portfolio and for sharing this journey with the department.
Thank you also to the Director-General, Mr Kingsley Makhubela, and his capable team for bringing our new department this far in a very short time. Mr Makhubela, thank you for your strategic leadership and guiding vision for the future of tourism. Furthermore, the unqualified report of the Auditor-General after the 2010/11 audit, which was the department’s first audit as a stand-alone department, demonstrates administrative success in establishing a sound governance foundation that will support the implementation of our mandate.
A special thank you to Thulani Nzima, who is the new SAT Chief Executive Officer, and his excellent team for working very hard together with the department to achieve its targets. In addition, I would like to express the department and SAT’s gratitude towards the private sector for the constructive relationship we have. Thank you to all our partners for engaging with us, and for your commitment to our shared growth goals.
To the chairperson and members of our portfolio committee we value and appreciate the good working relationship with Parliament.
I thank you.