Tourism Grading Council briefing; Tourism Agreements with Kenya, Egypt ,Vietnam

Committee: Tourism

Chairperson: Mr J Sibanyoni (ANC)

Date of Meeting: 08 Nov 2010

Summary

The Tourism Grading Council of South Africa briefed Members on graded establishments in South Africa. Members were provided with an overview on the process, criteria, monitoring and evaluation of establishments. The Council had in 2009/10 completed a total of 7 642 gradings compared to the 986 completed in 2002/03. The Awards Committee of the Council made the final decision but ultimately relied on the expertise of assessors when making determinations. Quality inconsistencies were a problem as establishments where quality differed considerably were given the same gradings. The root of the problem was assessors and approvals by the Grading Council. The Awards Committee had a difficult task. The Council required an overhaul and for 2011-2014 strategies were identified to enable delivery on outcomes. The first was to stop the illegal use of grading stars and to protect the Council brand, the second was to improve the competence and integrity of assessors, the third was to simplify the billing process and implement a more equitable fee structure, the fourth was to introduce grading criteria which was globally recognised and credible to visitors and stakeholders, and the fifth was to improve the integrity of the grading process using information technology Infrastructure and the sixth and last strategy was to convince the industry to see the value in participating in the grading system.

Members engaged a great deal on the issue of access to Council and what it was doing to reach persons at grassroots level. Its efforts in rural areas were especially impressed upon. The Council like many Government departments in tourism had financial constraints and its efforts were limited. The difficult issue of balancing transformation in the industry whilst maintaining certain levels of quality was recognised. It was something that needed further discussion. Government processes on procurement were questioned as many times ungraded establishments were used. It was felt that the practice should come to an end and that Government should set a good example and use graded establishments.

The Committee was informed of the agreements between South Africa and Kenya, South Africa and Egypt and between South Africa and the Peoples Republic of Vietnam on issues relating to tourism. Such agreements required no ratification by Parliament in terms of Section 231(3) of the Constitution; hence the Committee did not have to deliberate or vote on them

 


Minutes

Tourism Grading Council of South Africa
Ms Thembi Kunene, Chief Quality Assurance Officer, Tourism Grading Council of South Africa (TGCSA) briefed Members on graded establishments in South Africa. Ms Kunene provided an overview on the process, criteria, monitoring and evaluation of establishments. The TGCSA had in 2009/10 completed a total of 7 642 gradings compared to the 986 completed in 2002/03. The Awards Committee which assented to gradings met 637 times in 2009/10 as opposed to 82 times in 2002/03. Its work had increased tremendously. The Awards Committee however relied on the expertise of assessors when making determinations. Some establishments were graded without even being seen. The TGCSA highlighted areas of concern. Quality inconsistencies were identified as a problem, as establishments where quality differed considerably were given the same gradings. The root of the problem was assessors and approvals by the Grading Council. The Awards Committee had a difficult task. It was difficult to double check 700 properties per month within an eight hour meeting. The number of assessors presently had decreased from 85 to 50. In 2008 a review was done on the TGCSA. With the overhaul of the TGCSA some assessors had been fired whereas others had resigned. The TGCSA used to be a Section 21 company. It was now a subcommittee of the South African Tourism Board. In 2009 the Minister of Tourism had appointed the members of the Awards Committee. Ms Kunene stated that the road ahead for the TGCSA 2011-2014 necessitated strategies to deliver on outcomes.


The first strategy was to stop the illegal use of grading stars and to protect the TGCSA brand. The new Consumer Protection Act 2008 to be implemented in 2011 would allow the TGCSA to take action against illegally graded institutions. The plaques displayed at establishments would also have better security features such as serial numbers.

The second strategy was to improve the competence and integrity of assessors. Four Provincial Master Assessors had been appointed. There was one in Johannesburg who would cover Gauteng, Free State and North West Province. The one in Nelspruit covered Mpumalanga and Limpopo Province; the Assessor in Cape Town covered Western Cape and Northern Cape, while the one in Durban covered KwaZulu-Natal and the Eastern Cape. There would be an annual performance review of all assessors. Contracts would be renewed on an annual basis. Assessors and TGCSA staff would undergo training on new grading criteria and the information technology (IT) system. Pre-screening of properties would also be done which was the main responsibility of the Provincial Master Assessor. The final decision was still made by the Awards Committee.


The third strategy was to simplify the billing process and implement a more equitable fee structure. In the past the TGCSA used to charge a grading fee based on the number of rooms that an establishment had. The grading fee was now based on the average room rate charged, the quality star grading applied for and the number of rooms an establishment had.


The fourth strategy was to introduce grading criteria which was globally recognised and credible to visitors and stakeholders. The criteria needed to be more specific and detailed. It should ensure consistency among assessors in terms of the grading that they awarded regardless of background travel experience. Details of how the research and review of the TGCSA was conducted mainly entailed three methods of primary research. There was an online survey conducted; one-on-one interviews with various industry stakeholders were conducted; and workshops were held in three major cities.   The research was useful in that concerns by the industry were highlighted.

 

Members were given an analysis of the 20 most raised concerns (slide 41-45). Room dimensions, reception operating hours and security measures were some of the issues that were of concern to establishments. With the overhaul of the grading system, terminologies also changed. Establishments would also be separately graded with regards to facilities catering for persons living with disabilities or impairments.


The fifth strategy was to improve the integrity of the grading process using IT Infrastructure. Handheld Dell tablets would be used by assessors for scoring purposes. The software programme was a new Quality in Tourism South Africa (QIT SA) System (slides 61-62).


The sixth strategy was to convince the industry to see the value in participating in the grading system. The TGCSA contributed towards South Africa’s identity on the global stage. Why the need to get graded? One reason would be that graded establishments offer consumer confidence.


Ms Kunene concluded with the notion that Government could set a good example by using graded establishments.

Discussion
The Chairperson stated that the question that was being asked was what the need for grading was. He responded that the idea was to protect the tourism industry of South Africa. The issue was about the integrity of the institution that was providing a service to the industry. Measures to strengthen monitoring and evaluation were needed. Whistle blowing should be encouraged.   “If I had a complaint to whom did I complain?” Poor quality of service and charging high prices did not help tourism. The TGCSA should be accessible to persons who wished to complain.


The Chairperson felt that perhaps the TGCSA had corrupt officials working for it. Assessors had to be persons with integrity. The President and Premiers of provinces should address issues of procurement by Government institutions. Only graded establishments should be used. The Committee would try its best to pressurise Government to use graded establishments.

Ms Kunene responded that monitoring the quality of services at establishments on a continual basis was extremely difficult. It was practically impossible given the TGCSA’s limited resources. Besides when some establishments become aware that the TGCSA was to visit everything would be perfect. Once the inspection was over service levels would drop again. The public was relied on for the most part to inform the TGCSA about the quality of the service received.

Ms J Manganye (ANC) asked how rural areas was expected to toe the line regarding grading of establishments when the road show by the TGCSA focused on big cities. She asked whether establishments which did not belong to any tourism association of some sort could also be graded.
How were assessors appointed? Was there a geographical spread? Quality assurance was mainly found in the major cities. She asked how often was establishments visited to check on whether they had the required quality of service.

Ms Kunene stated that the TGCSA could at present not reach out to rural areas as it had funding constraints. The priority was to address graded establishments first. She added that establishments did not have to belong to tourism associations in order to be graded. No new assessors had been appointed. Some had been fired whereas others had resigned. Assessors were self employed entrepreneurs. They were not employed by the TGCSA. Prior to 1994 an inspectorate of assessors had existed and had not been welcomed by the industry. The system had collapsed and in 2002 Minister Valli Moosa had established the TGCSA which started off as a Section 21 Company. The TGCSA currently formed part of the Department of Tourism. Assessors worked on a commission basis and received a percentage of the grading fee paid. Service level agreements existed between the TGCSA and assessors. Assessors had to grade a minimum of 200 establishments. Limitations were set on assessors.  In some instances assessors tried to make a quick buck by trying to squeeze establishments through a particular grade.

Ms J Maluleke (ANC) also felt that the TGCSA did not reach rural areas. Why were establishments asked whether they wished to be graded. She asked whether the TGCSA actively reminded graded establishments to renew their grading applications. The criterion for the Awards Committee seemed not to be gender sensitive. What actions were taken against establishments that did not keep up to its quality of service grade? Information on grading should be made more accessible to persons in the industry.

Ms Kunene said that the TGCSA was a business unit of SA Tourism. The Minister appointed the Awards Committee. Advertisements were placed calling for nominations. 300 nominations had been received. An independent human resources company had shortlisted candidates. Persons were chosen because they were respected and trusted in the industry. The final appointments were made by the Minister. Reminders were sent to graded establishments to renew their applications.

Ms M Njobe (COPE) asked how establishments displaying illegal star rating plaques obtained them. Was there corruption on the part of officials? What actions were taken to address the issue?
Funding constraints experienced by TGCSA were not a new phenomenon in tourism. The Department of Tourism was grappling with the issue for many years. The Committee wished the budget for tourism to be in line with its activities and strategies. She wished to highlight the fact that some establishments were excellent but dropped the ball on small things. For example many excellent hotels had inferior quality steam irons in their rooms. The idea that Government should only use graded establishments was supported.

Ms Kunene said that the TGCSA had had an overhaul of its systems. There was a new IT system in place. Grading criteria were new, stricter and cleaner. On the issue of illegal star rating plaques she explained that establishments copied them or had them made. The Consumer Protection Act would assist the TGCSA to combat the practice.

Ms X Makasi (ANC) also felt that there was gender inequality on the TGCSA’s Awards Committee. Monitoring of establishments should be strengthened.  Establishments in townships were clueless as to how grading worked. Other institutions that were graded felt that even though they were graded there was no business to speak of even though they were graded. The issue of marketing establishments that had been graded should be looked at.

Ms V Bam-Mugwanya (ANC) asked what meet and greet was. She asked what relationship the TGCSA had with provincial tourism boards. There was not enough information to tourism operators at grassroots level.  Many black establishments opt not to be graded because they lack resources to upgrade their facilities. She asked how tourism grants to SMMEs were allocated. Attempts to find out were fruitless as everybody wished to pass on the buck. The grants would be useful to black establishments for upgrading. Why was grading not made compulsory? What were the drawbacks of making it obligatory?

Ms Kunene responded that meet and greet was what happened at hotel receptions when guests arrived. It was important for guests to be welcomed. The interaction with guests at guest houses and lodges was somewhat different than at hotels. The TGCSA was working with provincial tourism authorities. Discussions were ongoing. Even the provinces had budgetary constraints. Interactions with local Government were also taking place. Compulsory grading was a topic that could be debated at length. Ms Kunene stated that in the past a semi-compulsory grading system was not supported. The current system was more liked and supported. The fact that the grading process was voluntary meant that there was a greater commitment to quality.

The Chairperson asked how the TGCSA managed the contradiction of the grading requirement versus emerging black economic empowerment (BEE) establishments. How was a balance between the two achieved? Encouraging transformation in the industry whilst requiring quality standards to be maintained was tricky.

Ms Kunene stated that encouraging transformation in the industry whilst requiring a certain level of quality to be maintained was indeed the single biggest challenge of TGCSA. It was difficult to strike a balance. The focus of TGCSA was quality assurance. Tourists did not care about whether establishments were white or black owned. They were only interested in a quality of service. The TGCSA had a brief and it was to grade establishments. The reality was that BEE establishments struggled to stay on par with the rest of the industry as far as quality of service was concerned. At the present moment in time South Africa had to strive for high levels of quality. Maybe at a later time concessions could be made. The debate regarding the issue needed to continue. The biggest problem with black establishments was that none of them wished to be 1- star establishments. Formalu1 hotels were 1-star and were now graded. Everybody wished to be graded 4 or 5-star. Establishments should first determine who their target market was first.

The Chairperson stated that the main issue was about limited resources. The tourism budget needed to be increased. The issue of transformation versus grading required intervention from Government. Market forces alone could not deal with the issue. It was a policy matter.

Ms Bulelwa Seti, Chief Director: Tourism Promotions, Department of Tourism, added that the Draft Tourism Bill aimed at addressing quality assurance in South Africa’s tourism sector needed to be considered especially as it related to grading.

Ms Kunene, referring to the use of ungraded establishments by Government, stated that the Public Finance Management Act 1999 (PFMA) required Government to obtain three quotes for accommodation. The cheapest quote, which was often from an ungraded establishment, would be chosen. It was a policy issue that required debate at the highest level.

The Chairperson stated that the PFMA could become too mechanical. A bit of discussion was needed.

Agreements between South Africa and Kenya, South Africa and Egypt and South Africa and the Republic of Vietnam on issues of tourism
The Chairperson stated that Members had been provided with a copy of a letter from the Minister to the Speaker of the National Assembly on the agreements.


The Chairperson asked members to make inputs.

The Committee was unanimous in its support for the agreements.

Mr Jerry Boltina, Committee Secretary, stated that all three agreements had been tabled in Parliament. They had been forwarded to the Committee for information purposes only. The Committee was not required to report on the agreements to the National Assembly. He said that it was possible for the Department to brief the Committee on the agreements if Members so wished.

Ms Manganye felt it important that Members be informed on the contents of the agreements.

The Chairperson informed Members that the Committee would be briefed by the Department on the agreements on 16 November 2010.

Ms Njobe asked what types of agreements were they and under what categories they fell. What was there relevance to Section 231 of the Constitution?

Mr Boltina responded that all three agreements had been referred to the Committee in terms of Section 231(3) of the Constitution. Such agreements required no ratification by Parliament. Agreements referred to Parliament in terms of Section 231(2) would require ratification by Parliament.

The Chairperson proceeded to read out Section 231(3).

The meeting was adjourned.