2010 World Cup readiness by SANParks & THETA & Federated Hospitality Association


14 September 2009
Chairperson: Mr D Gumede (ANC)
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Meeting Summary

The committee was briefed by South African National Parks (SANParks), the Tourism and Hospitality Sector Education and Training Authority (THETA) and the Federated Hospitality Association of Southern Africa (FEDHASA) on their state of readiness for the 2010 World Cup.

SANParks provided an overview of its expenditure and readiness. The infrastructure dated back to the 1970s and before, staff accommodation was unsuitable and that a successful park expansion project had been started. Buildings were generally good and roads were fair in the parks. SANParks had used a 2.3% of asset value figure to assess what it would need, but was having to manage with a smaller budget. It was focusing on the local market and international market, and would divert funds to where they were most needed. Members questioned the 2.3% figure, asked what benefits parks offered to the local communities, how black people were being brought into the tourism sector, and how the budget shortfall would be dealt with.

The THETA noted that although it reported to the Department of Labour, it also served the Departments of Tourism and of Higher Education and Training. For the purposes of 2010 it was also coordinating with the Departments of Transport and of Sports and Recreation. Its skills plans covered the periods up to and after 2010. It would be training all the 2010 volunteers. Members asked how many of the volunteers were from rural areas, why it was focusing on urban areas, how people could become service providers in their own areas and whether the THETA’s training was geared to market need and capacity.

FEDHASA noted that it dealt with all issues around accommodation, and that it had been working with MATCH. Contracts had attempted to include small medium and micro enterprises into a structure, but there was some lack of understanding – not assisted by incorrect media reports – about the processes to be followed. South African room prices were about half of the price of accommodation offered in Germany during its hosting of the World Cup. Members suggested that they would have found a background presentation helpful, but were assured that they would be informed of any problems by FEDHASA. Members noted that there seemed to be discrepancies with information provided by the Department of Transport, asked about the FIFA requirements and how many rooms were estimated to be needed, and stressed the need for synergy.

Meeting report

State of Readiness for 2010 World Cup: Various organisations’ briefings
The Chairperson highlighted the importance of using South Africa’s natural heritage in order to engender economic growth in the lead up to, and after, the World Cup 2010. He said that the Committee wished to hear from the Tourism and Hospitality Sector Education and Training Authority (THETA) whether it would be able to train enough people to provide the necessary services for 2010. The Committee also wished to hear from the Federated Hospitality Association of Southern Africa (FEDHASA) whether its expected capacity for 2010 was acceptable.

South African National Parks (SANParks) presentation
Mr Sidney Soundy, Chief Operating Officer, SANParks, outlined the background, state of infrastructure and maintenance requirements of SANParks. He added that the infrastructure of SANParks was mainly built during the period from 1930 to 1970, that staff accommodation was presently unacceptable, and that SANParks had initiated a successful park expansion project. With regards to infrastructure, the buildings were rated good and roads were rated fair. Ideally, SANParks would need an annual figure of R143 million, based on a maintenance rate of 2.3% of asset value, to upgrade everything, but was having to curb its expenditure to R53 million.

Mr Glenn Phillips, Managing Executive: Tourism & Marketing, SANParks, outlined SANParks’ strategy for 2010 and its state of readiness. He noted that the organisation was working closely with MATCH to optimise the opportunity being presented. He stated that SANParks had implemented a sustainable development plan and was focusing on the local market as well the international market, by seeking to retain its existing local client base. Further details were set out in the presentation document.

Mr G Krumbock (DA) asked where the maintenance figure of 2.3% came from, as it was unrealistically high when compared to market figures. He added that people would be expecting accommodation commensurate with a national park, not a hotel.

Mr Soundy noted Mr Krumbock’s concern, and replied that he would rather not debate the figure now as he did not have the technical data with him, but would furnish Members with all the details in written form. He added that maintenance costs related to bulk water supply and sewerage due to the aging infrastructure.

Ms M Njobe (COPE) asked what would happen if the R9 million budget shortfall was not met. She asked what benefit parks offered to the local communities.

Mr Phillips replied that SANParks had allocated money to where the infrastructure needed to be upgraded, and that in order to ensure that specific camps met the three star grade, it would have to divert money from other projects.

Ms M Shinn (DA) asked what would not be completed by March 2010, and in which camps SANParks would tend to concentrate the 2010 visitors.

Mr Soundy replied that one project in the West Coat was being rechannelled, due to changes with regard to Environmental Impact Assessment compliance requirements. He added that the two other projects were insignificant in terms of revenue generation. The camps that were chosen in the Kruger National Park (KNP) were Bergendal, Pretoriuskop and Skukuza.

Mr Phillips added that these camps were chosen due to their proximity to airports and visitor mobility logistics.

Ms S Sithole (ANC) was worried that black people were getting left out of the tourism industry, and stated that despite the South African economy growing, it was not creating jobs. She asked what SANParks was doing to take historically disadvantaged individuals on board.

Mr Soundy replied that socio-economic development was a very serious issue. SANParks had requirements for concession operators in parks to comply with specific Black Economic Empowerment (BEE) contractor targets, in term of supply agreements with local communities, and the employment of local people. He added that it had a supply procurement process that mandated use of small, medium and micro enterprises.

Mr Phillips added that there was a significant multiplier of jobs per rand for locals in terms of their proximity to parks and that the full details would be forwarded to the Committee.

Presentation by Tourism and Hospitality Sector Education and Training Authority (THETA)
Mr Mike Tsotetsi, Chief Executive Officer, THETA, tabled his presentation. He stated that THETA reported to the Department of Labour (DoL) primarily, but that it also served the Department of Tourism (DoT) and the Department of Higher Education and Training (DHEAT).

The Chairperson asked Mr Tsotetsi to align his presentation to focus on the implications for 2010.

Mr Tsotetsi stated that the skills drive needed to be planned before 2010 and that THETA’s plan covered the periods both before and after 2010. He then outlined its expenditure and actual demand, and stated that there was a large discrepancy. Mr Tsotetsi outlined the priorities facing THETA (see attached document). He stated that it was THETA’s responsibility to ensure that 2010 volunteers went through its processes and were adequately skilled. Mr Tsotetsi added that 2101 sports projects involved all Sector Education and Training Authorities (SETAs) who were needing to implement 2101 goals in their sectors. He added that THETA had partnered with the Department of Sports & Recreation (DSR) to ensure that those who managed sports facilities had the necessary skills, and to ensure that there was support for small tour operators. A breakdown on 2008/09 performance and income was provided (see attached presentation)

Mr B Zulu (ANC) asked how many of the 25 000 volunteers for 2010 were from rural areas, and what would happen to the volunteers after 2010.

Mr Tsotetsi replied that THETA was only a partner in training. The FIFA Local Organising Committee (LOC) was responsible for advertising and vetting of volunteers. He added that training would begin in March 2010. The THETA would then determine from the LOC how many volunteers were from rural areas.

Mr L Khorai (ANC) stated that THETA seemed to be focused on urban areas, and requested information on its activities in rural areas.

Mr Tsotetsi replied that training was not taken up in the same manner in rural areas, because the SETAs were dependent on employers and training areas, and so, in the rural areas, lack of employer organisations and training facilities would affect ability to deliver.

Ms Sithole was also concerned by the fact that THETA did not appear to operate in rural areas. She had written to the organisation, but had received only one response, advising that if she wished to help train people a fee of R35 000 would be required, which meant that she could not afford to assist the people in her community.

Mr Tsotetsi apologised for Ms Sithole’s grievance. He corrected the impression created. He stated that it was no longer necessary for her to pay to become a service provider. In the past, service provider training programmes were run by companies that charged fees. Currently, the THETA was implementing free training, and that all that was required was commitment to the training period.

Ms Shinn stated that the THETA was training significant numbers of unemployed people, but that there was a shortfall of levies. She asked whether it was not perhaps training too many people, and that there would not be a market to absorb their skills.

Mr Muzi Mwandla, Manager: Skills Development, THETA, stated that THETA was an authority that was responsible for making training available. The service providers actually did the training. He added that when it came to funding, this was done based on the number of employer applications submitted for learnerships, and that in many cases the employers’ demands exceeded what THETA was able to fund. Mr Mwandla stated that almost all those who completed learnerships were subsequently recruited.

Federated Hospitality Association of Southern Africa (FEDHASA) presentation
Mr Brett Dungan, Chief Executive Officer, FEDHASA, stated that the FEDHASA board was composed of all role-players who dealt with accommodation in the hospitality industry, and that it dealt with all issues around accommodation. He added that they sat also on the Tourism Grading Council of South Africa (TGSA) board. Mr Dungan stated that before the bid for 2010 was made, the South African Football Association (SAFA) asked FEDHASA whether it could supply the accommodation commitment. Since that time, it had been working with MATCH in a transparent and beneficial relationship.

Mr Dungan stated that the challenges were taken into account and that contracts were drawn up, which resulted in trying to pull small medium and micro enterprises - Bed & Breakfasts and other similar business - into a structured role. He added that all formalised hotels had been contracted and booked. Mr Dungan stated that the biggest challenge lay in determining how many rooms there were available. He said that this figure was in the region of 100 000.

He stated that only 13% of small, medium and micro enterprises (SMMEs) had signed up and that he did not know whether this was because of lack of understanding. If SMMEs wanted to be involved, then they needed to be involved with MATCH. Mr Dungan stated that the process was open to everyone and that invitations had been tendered. He added that the Sunday Times had run an article that was highly inaccurate. In order to ensure a smooth logistics service, registration with MATCH by the accommodation providers was essential. With regard to the article, he added that it was important to look at the response of actual hoteliers. It was normal for businesses to pay a 20% booking fee. South African room prices were about half of the price of accommodation offered in Germany during its hosting of the World Cup. Mr Dungan stated that FEDHASA had surpassed the Department of Trade and Industry’s black economic empowerment requirements.

Mr Krumbock stated that he was not aware of some of the issues raised, and felt that it would have been helpful for Mr Dungan to present a paper on the background issues, so that the Committee could properly evaluate and comment on the process.

Ms Sithole asked whether the Committee could receive a detailed document in simple English, as well as a full day session with Mr Dungan to address the content of his presentation and FEDHASA’s problems.

Mr Dungan replied the presentation was already a simplified one, which had not gone into the legal issues around implementation. There was a huge scope of issues to be covered, and he doubted whether spending an entire day on these would make any difference. He asked that the Committee should let FEDHASA do its job, and that FEDHASA would inform the Committee of any problems it faced. Mr Dungan added that there was a morass of bylaws and he could categorically state that not a single hotel was compliant with all of them.

Ms Shinn stated that she was surprised that the backlog of municipal approval processes that had not been resolved. She asked whether the transport problems highlighted during the Confederations Cup had been addressed.

Mr Dungan stated that spurious articles in the media, which neglected all the facts and made sensationalist claims, had proved to be a challenge.  He asked for assistance with regard to the go-ahead for contractors to start working on some hotels. He could provide the Committee with the necessary details.

Mr Zulu asked how taxi drivers were going to participate in the plans for 2010, and added that it appeared that they had failed to come on board. He added that the behaviour of these drivers was terrible and asked how these individuals would be trained and educated.

Mr Dungan replied that the taxi issue was a real one, but that he could do nothing about this as it was not his competency or that of FEDHASA.

The Chairperson reminded Members that FEDHASA covered accommodation, not transport. He added that he was concerned that the higher prices during the event may make South Africa seem to be an expensive destination, and this would impact negatively on future tourism.

Mr Dungan replied that there would be some hotels providing accommodation at very high rates, but that most normal hotels would be contracted at normal contract rates, as per the event agreements.

Ms Njobe stated that these presentations and those from the Department of Transport, when read together, seemed to indicate inadequate coordination of preparation for the 2010 event. She also said that THETA’s training figures and FEDHASA’s accommodation figures did not appear to correlate with the projects given by the Department of Transport.

Mr Phillips replied that the LOC’s role was to coordinate elements, and that there were some problems, but that this issue was being addressed.

Mr Tsotetsi replied that there definitely was coordination. THETA had officials from the DoT serving on its board. He added that their plans would not have been approved if the Departments of Sport and Recreation and Transport had not also signed off on them.

Mr Krumbock asked what was the requirement for rooms for the FIFA contingent, and what was FEDHASA’s estimate for total accommodation needs. He asked for more information on MATCH contracts, where people would be staying in one location and be transported to games.

Mr Dungan replied that MATCH required 55 000 rooms for the FIFA contingent, and that there were 125,000 “fit for purpose” rooms. He added that all those involved were working on estimates of 300 000 to 350 0000 visitors. Mr Dungan stated that it was impossible to provide accommodation in each stadium city for the number of visitors that the stadiums would hold, and so there was a need to transport people from other localities. He added that the logistics were managed by MATCH in order to allow for a smooth and coordinated approach.

The Chairperson asked whether the industry could submit to the Ministry a list of its concerns about the regulations. He asked whether FEDHASA was facing any shortage in terms of skills.

Mr Dungan replied that FEDHASA worked closely with THETA to ensure that the industry trained people where needed.

Mr Krumbock was concerned that there was a discrepancy with the figures provided by FEDHASA and Airports Company of South Africa in regard to visitor numbers.

Mr Dungan replied that he wanted to be as diplomatic as possible, but that a lot of people were using 2010 to service their budgets.

The Chairperson stated that role-players needed to reflect on whether there was synergy and needed to keep the Committee updated in order for Members to intervene and assist.

The meeting was adjourned.


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