State of the Nation Address: Implications for tourism: Researchers' briefings

Committee: Tourism

Chairperson: Mr D Gumede (ANC)

Date of Meeting: 14 Feb 2011

Summary

The Chairperson summarised the six areas highlighted by the President in the 2011 State of the Nation Address, noting that tourism had received a specific focus. The Parliamentary Researcher then outlined the areas of SONA that had a direct or indirect impact on the work of the Department of Tourism (the Department) and the tourism sector. She focused on the need to improve the tourism infrastructure, the importance of the cultural sector, hosting of international events, and creation of tourism in disadvantaged communities, as well as the need to focus on improving transport and roads that had been neglected in the past. Visa requirements could be re-examined to encourage visitors. Government should create incentives, use public / private partnerships, and concentrate on marketing to local and foreign tourists, on promoting cultural events and caring for historical monuments. Parliament would need to pay attention to how Expanded Public Works Programmes could develop tourism and infrastructure, and should ensure alignment across the provinces on events. She suggested that there should be engagement with the Department of Home Affairs on visa requirements, and with key stakeholders on creating an enabling business environment, as well as calling for an increase in the tourism budget.

Dr Reedwaan Ismail, from the Cape Town University of Technology, emphasised that visitors saw South Africa as a venue not only for holidays, but also for meetings, conferences, and hosting of other events. 95 major meetings were already arranged between 2010 and 2016. He recommended the development of a cultural and industry sector under one roof, closer to the airports. He also gave some recommendations for job creation opportunities in the tourism industry. He recommended that the small business funding of the various financial institutions should be merged. The focus, in 2011, would be on job creation through meaningful economic transformation and inclusive growth, and he therefore urged the Department and government as a whole to ensure a greater success rate of new businesses, by creating jobs and offering other opportunities. He suggested that the Department should be hosting tourism conferences and making research funding available. The implications for the Portfolio Committee included the need to engage actively with all tourism stakeholders and to arrange oversight visits, as well as scrutinise the budgets and strategic plans of the Department to ensure that it was complying with priorities. The Committee should also lobby other structures in an attempt to increase the marketing of South Africa on the African Continent, and assist in transformation of the tourism sector.

Members commented that tourists were discouraged by the poor state of cleanliness in the country. They urged that proactive initiatives and encouragement be given to small businesses. They questioned the visa requirements and the reason to change them, asked about the role of the finance institutions, and suggested that women should be playing a greater part in promoting tourism, and there should be greater access to funding and marketing to assist those running small businesses. They questioned if tourism graduates were leaving South Africa to seek employment elsewhere, and asked what could be done to address negative publicity.


Minutes

Chairperson’s opening remarks
The Chairperson pointed out that six areas had been highlighted by the President in the most recent State of the Nation Address (SONA) as requiring attention and improvement in 2011. These were job creation and funding, mining and beneficiation, crime control, appointment of qualified personnel to the right positions, comprehensive rural development programmes and tourism, in order to strengthen the existing markets. The Chairperson summarised what the President had emphasised on tourism and added that the President had highlighted the success of the country’s tourism sector, noting that one job was created for every sixteen tourists.

Analysis of 2011 SONA:
Parliamentary Research Unit Briefing
Ms Joyce Ntuli, Parliamentary Researcher, focused her presentation on areas of the 2011 SONA that had a direct and indirect impact on tourism. She mentioned that flexible visa requirements could create an increase in the numbers of tourists to South Africa, but it was necessary to ensure that at the same time this would not promote criminal activities and would not impinge upon state security. Bidding for and hosting international events could improve landing slots at foreign airports, which would create demand in tourism. Tourism had to be created in disadvantaged communities and towns, in order to facilitate tourism infrastructure development. The transport and road infrastructure that had been ignored in past years now had to receive greater attention, as this would create job opportunities. Heritage and cultural infrastructure had to be protected and conserved.

Ms Ntuli suggested that Government had to create incentives that would benefit small businesses, and mentioned public/ private partnerships. She emphasised that marketing was of great importance in attracting local and international tourists. She explained that marketing of local festivals played an important role in economic growth. Cultural events had to be promoted nationally and internationally, and historical monuments had to be cared for, as they were of importance.

Ms Ntuli informed the Committee that there had been insufficient funding for the new businesses and expansion of existing businesses in the past. It was now time for assistance to be given on the role of the State owned enterprises (SOEs) and development of financial institutions. All small, medium and micro enterprises had to be supported. The -turnover for small businesses was under way. The introduction of New Growth Path (NGP) had trickle-down effects for job opportunities, but this had not worked even though the economy was growing.

Close monitoring of tourism-linked infrastructure development through the Expanded Public Works Programmes (EPWP) would be one of the implications for Parliament. She suggested that there must be constant engagement between Parliament and the Department of Tourism (DoT) in regard to Cultural Tourism. She also suggested that Parliament needed to oversee and ensure that there was alignment in the promotion of events that were to take place in different provinces, and had to ensure that the different provinces abided by the 30-day payment period. She recommended that Parliament should also engage with the Department of Home Affairs (DHA) in order to assess the possibility of visa requirements being relaxed where necessary. Parliament needed to have ongoing reviews and dialogue with key stakeholders on creating a business environment that encouraged entrepreneurship. She urged the Committee to advocate for an increase of the tourism budget and for development and a focus on rural tourism marketing. All tourism projects needed funding.

Ms Ntuli finally touched on the progress of success stories mentioned in the 2010 State of the Nation Address, including World Cup infrastructure, and addressing negative perceptions of crime by tourists.

Briefing by Dr Reedwaan Ismail
Dr Reedwaan Ismail, Head: Department of Strategic Projects and Initiatives, Cape Town University of Technology (CPUT), also briefed the Committee. He explained that the State of the Nation Address outlined the highlights of Government’s achievements and challenges, and mapped the year ahead for the government. SONA also created government accountability to the public. Parliament’s theme for 2011 was celebrating the legacy of freedom by strengthening the link between Parliament and the people. It would do so by making itself more accessible to the South African public, creating opportunities for meaningful involvement and participation.

Dr Ismail stated that the President had identified tourism as a priority area in creating jobs. Tourists saw South Africa as a place for meetings, conferences, a holiday destination and hosting of other events such as sport. This helped to grow tourism. There were 95 meetings secured in South Africa between 2010 and 2016. Tourism had to be boosted by improving tourism infrastructure and hosting more international sporting events. He recommended the development of a cultural and industry sector under one roof, closer to the airports, to attract tourists.

Dr Ismail also gave some recommendations for job creation opportunities in the tourism industry. He also suggested that Khula, SA Micro Finance Apex Fund and the Industrial Development Corporation (IDC) should be merging their small business funding in order to direct more resources to small businesses. He reminded the Committee that the President had stated that 2011 had been declared the year of job creation through meaningful economic transformation and inclusive growth.

Dr Ismail informed the Committee that 8 out of 10 new businesses in South Africa failed within their first two years, due to various reasons which he would not go into. Both government as a whole and the Department of Tourism (DoT) could play their role, creating job opportunities and opportunities for partnerships or mergers. Some examples of the methods that could be employed were experiential training, internships, mentoring, infrastructure, and networking, partnerships between DoT and tertiary institutions all over the country, promotion of sites, walking and rickshaw guides, marketing of cruises, medical services and accessibility tourism.

He suggested that DoT and its partners also ought to host tourism conferences for students, and make research funding available. He also suggested that DoT should establish a partnership with FEDHASA, private tourism collages and tertiary institutions. Dr Ismail stated that DoT could use indabas and have tourism icons travel around South Africa, to promote the national priority of job creation through meaningful economic transformation and inclusive growth.

Dr Ismail then moved to what impact the 2011 SONA had on the Portfolio Committee. He thought that this required the Portfolio Committee to engage actively with tourism stakeholders, asking them to brief the Committee, and hold oversight visits to tourism initiatives and projects. The budget, strategic plans and annual reports of DoT had to be scrutinised to ensure compliance with government priorities and spending. The Committee had to lobby structures such as the New Partnership for Africa’s Development (NEPAD), Pan African Parliament (PAP) and Southern African Development Community (SADC) in order to market South Africa to the whole African Continent.

The Committee must also assist in the transformation of the tourism sector, to ensure that opportunities were created for all South African citizens to benefit from this growing sector of the economy. South Africa would be attending the BRICS Summit (Brazil, Russia, India, China, South Africa) in Beijing in April, and this could be an opportunity to gain substantial trade and investment benefits for South Africa, in which the DoT should also become involved. Job creation should enhance youth development. He also suggested that DoT must use the national flag to promote tourism, as the use of this flag had played a huge role in the FIFA World Cup. All these efforts must emphasise that job creation was a priority.
           
Discussion
Mr G Krumbock (DA) stated that one of the reasons that dissuaded tourists from coming to South Africa was that the country was very dirty. He urged that the importance of cleanliness should be included in the life skills subject, in all schools in the country. He also suggested that proactive initiatives and encouragement had to be given to small businesses, by providing enough information about tourism and how they could improve their businesses.

Ms M Njobe (COPE) wanted clarity as to whether there were difficulties in obtaining visas to visit South Africa.

Ms Ntuli explained that it was not difficult for tourists to get visas. However, it was felt that some of the requirements should be relaxed for nationals of certain foreign countries, in certain circumstances, to assist in attracting more tourists, as that would increase South Africa’s economic growth.

Ms C Zikalala (IFP) noted her pleasure that the President had announced that DoT contributed the country’s economic growth. She wanted to know the role that was played by Khula and IDC in tourism, commenting that they seemed to be ineffective. She also suggested that women should be promoting tourism amongst their circle of friends, and in social gatherings, as well as tourism being promoted in schools.

Ms Ntuli agreed with the Committee that Khula was seemingly ineffective. It had now been suggested that all funding institutions ought to be centralised.

Ms V Bam-Mugwanya (ANC) agreed with Mr Krumbock about the poor state of cleanliness. She suggested that these presentations be forwarded to DoT, so that they could take note of the comments.

Mr Krumbock complimented Dr Ismail on his ideas and initiatives, but expressed the view that he had placed more emphasis on the role of government, and less on individual businesses, although government was also interested in private business. He asked if Dr Ismail was involved in the tourism industry. He thought that there should not be so much reliance placed on personal experiences and hearsay as the best tool for marketing. He reminded the Committee that during the oversight visit to Khayelitsha, Members had discovered that there were many running small businesses who had great capability, but who lacked funding and marketing opportunities. 

Dr Ismail reminded Mr Krumbock of his recommendation was that conferences should be organised by DoT, in partnership with others in the tourism industry, in order to create jobs. He provided support services in the tourism industry, and was responsible for compiling a tourism dictionary and diary, which would be launched at the Indaba.

Ms M Njobe (COPE) wanted clarity as to how many tourism graduates left the country owing to high unemployment rates. She had thought that DoT and tertiary institutions were in partnership. She also noted that negative publicity affected tourism, and asked what could be done to address negative perceptions. She also asked that Dr Ismail offer some fresh ideas to improve domestic tourism. Lastly, Ms Njobe asked if CPUT was used by the Department of Tourism to do its research.

Dr Ismail confirmed that there were no tourism graduates who had left the country due to unemployment, and promised to provide the Committee with statistics of tourism graduates. CPUT did not do research for SA Tourism, although it did run its own research programmes.

The Chairperson thanked the delegates for the informative presentation, and said that unfortunately the Committee had insufficient time for more discussion. He reminded Members about the Tourism Summit, intended for all tourism stakeholders, which would be held in two weeks time. The Department of Education had apologised that it would be unable to attend.

Committee Minutes of 9 February 2011
Ms Njobe noted that it would be useful to include, in the Minutes of 9 February, the responses that were given by the Department to the Committee, as it would serve as a good reference point for the future.

The Committee Secretary queried this, saying that it seemed to contradict the previous resolutions of the Committee as to what must be included in and excluded from the minutes.

The Chairperson agreed with Ms Njobe that the responses of the Department should be included. The Committee’s concerns were outlined, but no responses were recorded.

The Committee agreed to postpone the adoption of the minutes until they were revised.

The meeting was adjourned.