South African National Parks on tourism development, growth, transformation, tariff increases

Tourism

20 August 2012
Chairperson: Mr D Gumede (ANC)
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Meeting Summary

Members appreciated the statistics and the information about the SANParks’ Responsible Tourism 2012-2022 Strategy but the bottom line was why had tariffs increased so drastically at parks. National Parks in SA should after all be accessible and affordable to all its citizens. The explanation given was that SANParks’ costs far outweighed its revenue and hence tariffs had to be increased. SANParks only received 15% of its funding from government; the remaining 85% had to be self funded. It tried to keep its prices in line with the Consumer Price Index (CPI). Good news was that SANParks had implemented a dual pricing system, one price for SA citizens and one for foreign visitors. This however applied only to entry fees but not accommodation.

The controversial issue of rhino poaching was also discussed. The Committee was informed that there was a national strategy in place to address the issue. The issue was challenging as rhino horn was even more in demand although the risks attached to poaching were so high.

Meeting report

South African National Parks (SANParks) presentation
South Africa National Parks was represented by Mr Glenn Phillips, Managing Executive Tourism and Marketing, and by Dr Nomvuselelo Songelwa, Senior General Manager: Operations Parks Division. Mr Philips explained the Responsible Tourism 2012-2022 Strategy. For 2011/12 guests to parks totalled 4.7 million.Visitors to Kruger National Park were more than 1.4 million. SANParks accommodation occupancy overall had been below 70% ever since 2010. However it was still higher than the industry norm of 40% plus. Kruger National Park occupancy was holding steady at 76% occupancy. SANParks’ accommodation revenue was more than R350m in 2011/12. SANParks’ activity income was more than R55m in 2011/12.SANParks’ Wild Card income for 2011/12 was around R25m. In previous years Wild Card income had declined. The company who had been granted the Wild Card concession had gone insolvent and hence SANParks had to take over the reigns. At present there were more than 80 000 Wild Card holders. The revenue from concessions had taken a dip due to the economic recession but there was upward movement during 2010 when the FIFA Soccer World Cup was held in SA.

The Principles and Minimum Standards of Nature-based Responsible Tourism was adopted in October 2011. Some of SANParks’ achievements for 2002-2012 were the new conservation fee structure, a real-time web reservation system; web based customer feedback, public-private partnerships and a tourism standards and audit mechanism. On the other side of the spectrum, challenges were identified for the period 2012-2022. More tourism revenue needed to be generated as the cost of operations was R1.2bn and assistance was needed by way of government grants or alternatively it had to generate more revenue, tourism profitability/surplus had to be enhanced, maintenance and renovation was also far from budget requirements, human resources and training was an ongoing issue and customer service was a focus area. The customer satisfaction index for 2010/11 versus 2011/12 for various SANParks regions and parks was given. The Cape Region showed a steady customer satisfaction index of 86%. Members were also given percentage performance figures for 2010/11 versus 2011/12 for SANParks’ reservations, reception, accommodation and activities – as evaluated by visitors. For example 81% of visitors were happy about activities and 85% were happy with how reservations were handled. Shopping and dining needed some work as there were service delivery issues. On demographics of the domestic visitor base, in 2001 black overnight visitors were only 2% compared to 8.6% currently. In addition in 2001 black day visitors was 14% of the total, the figure had increased to 29.7% at present. The next 10 years of SANParks work was guided by the National Tourism Sector Strategy. It had to diversify product and experiential offerings. It also had to differentiate parks on their natural and cultural attributes. The idea was to expand commercial operations beyond SANParks. Opportunities for revenue generation in each park and outside its boundaries had to be identified. It had to become sales focused.

SANParks tried to keep its pricing in line with the Consumer Price Index (CPI). When in 2008 inflation rose, SANParks had increased its tariffs. A 6.2% tariff increase was to take effect in November 2012 which was in line with the CPI. The increases were required so that tourism and conservation could be funded. Some strategic tasks identified were to implement responsible tourism minimum standards, reduce the cost of tourism operations, to grow tourism revenue and to encourage infrastructure development and maintenance. Members were also provided with figures on transformation within SANParks as it related to males, females and various race groups. A divisional breakdown was also given pertaining to permanent and non permanent employees.

Discussion
The Chairperson asked if government efforts were making an impact on rhino poaching. To combat rhino poaching resources and capacity was needed. The thing that attracted tourists to SA was its affordability.

Mr S Farrow (DA) referred to the renewal of concessions and noted that when SANParks came in, tariffs increased by 150%. There were great concerns over the tariff hikes. He noted that the assets within parks were national assets and had to be accessible to all South Africans. If revenue was R800m and costs were R1.2bn then there seemed to be a huge shortfall. He felt that costs should be rationalised by some sort of government subsidy. Conservation funding should be the responsibility of government. Visting parks in SA were perhaps fair value to a tourist from the United Kingdom but to the average South African, prices were too expensive. Prices should be more affordable. The Committee also needed more information on rhino poaching. Rhinos were even poached in the Kruger National Park. He noted that there had been talks of charging a levy on entry at airports to be used to combat rhino poaching. Concerns had been raised by concession holders that they had to enter the market and tender for concessions along with others after they had invested millions of rands in their businesses already.

Mr Phillips agreed that rhino poaching was a crisis. He was not personally involved in combating rhino poaching as it was managed by the Department of Environmental Affairs. All role-players got together to have a joint strategy. The Department of Environmental Affairs had funded the employment of 100 extra rangers to fight rhino poaching. There was no quick fix, it would take time. The issue of value for money and affordability was a key focus for SANParks. There was a broad range of products on offer suited to everyone’s pocket. Prices were being kept as low as possible whilst keeping it close to the CPI. 80% of SANParks visitors were domestic and only 20% were foreign. There were initiatives where indigent persons and kids were allowed to visit parks for free. On the issue of conflict with concessionaires, he noted that Tsitsikamma National Park had been taken over by SANParks from the Department of Forestry. The concessions contract had been for a set period and had expired. National Treasury Regulations and the Public Finance Management Act around public-private partnerships did not allow change in the length of term of contracts or changes in the concession fee. SAN Parks paid for the brochures of concessionaires. He pointed out that at
Tsitsikamma National Park there was a legal issue with a concessionaire. The retail tender was also to go out again at Tsitsikamma. SANParks was in dire need of funds. 15% of funding came from government and 85% was their own funding. Government grants had stagnated and had not kept up with inflation. Government did however fund projects.

Mr R Shah (DA) noted that even though SANParks had outsourced restaurants and shops it did not have the desired effect. He asked who owned the huge supermarket located within the Kruger National Park. Was it owned by the individual who managed the Park? He asked what mechanism SANParks had in place to deal with staff grievances. On the Committee’s oversight visit to the Kruger National Park, he had clandestinely spoken to staff and it came to light that many staff members had grievances. Some staff members complained that they had been employed for six to seven years without getting promoted whilst newly appointed workers were promoted. It also seemed that staff members had perpetual temporary contracts. He said that more facts and figures on poaching should be forwarded to the Committee. Figures on crime, fraud and theft at parks should also be provided. The Committee needed to know who committed the offences, and how they were dealt with. He asked whether the rumours were true that the
Tsitsikamma National Park was to close down soon.

Mr Phillips noted the Chief Executive Officer of SANParks Mr David Mabunde had provided a full report to the Department of Environmental Affairs on all the issues that the Committee wished to obtain information on. He confirmed that outsourcing of shops and restaurants had taken place. Service delivery at restaurants and shops was not a problem; the problem was the prices of goods sold at shops and restaurants. SANParks intended to monitor the mark-ups on goods sold. He pointed out that SANParks was making a pretty penny since shops and restaurants had been outsourced. Experience had shown that where the owner of a restaurant was running it, then the business would succeed. Owner-run franchise shops also did well.

Dr Nomvuselelo Songelwa, Senior General Manager: Operations Parks Division, noted that SANParks connected to society in various ways. Issues of transformation were broad. Conservation was a very labour intensive exercise and hence the costs were high. Balancing tourism and conservation remained a challenge. On grievances by staff, she pointed out that SANParks was a public entity and grievance processes were in place. Rangers at Kruger National Park had gone on strike but the issue had been dealt with. A system was in place and engagement was continually taking place. Other issues like crime at parks did take place and SANParks had statistics on it. They worked closely with the South African Police Service and the South African National Defence Force.

Mr Farrow referring to the entry gate fee payable by day trippers and asked for more clarity. The tariffs were a huge problem and tour operators refused to take visitors to places like Cape Point as it was way too expensive. Tour groups had to pay per vehicle as well as per head.

The Chairperson stated that SANParks had stated that the prices charged were in line with inflation.

Mr Phillips responded that at Cape Point there was no connectivity as yet so there were no telephones or cellphone reception. As a result the dual pricing system was not in place as yet. Cape Point was a high value park but it had challenges of infrastructure. He would provide historic pricing figures to the Committee.

Mr F Bhengu (ANC) asked if SANParks had plans to take into consideration the views and points of other stakeholders regarding South Africa’s parks.

Mr Phillips explained that part of the legal process of park management was to have stakeholder forums. In order to get buy in from communities one had to get them on board. The historical background of Kruger National Park was that two thirds of it was embroiled in land claims disputes. If the Park was not fully utilised these land claims might resurface. SANParks made sure communities were protected in terms of public-private partnerships.

Dr Songelwa pointed out that legislation required stakeholder engagement to take place via park forums. Engagement was taking place on various issues. Since 2011 SANParks had taken 1% of its revenue to be invested in social investment programmes.

Ms M Njobe (COPE) said that the figure of 8.6% for black overnight visitors seemed small. She would have liked to have seen a comparison between various other racial groups such as coloureds and Indians. Black people did travel a great deal but it was not necessarily as tourists. Regarding SANParks’ 2012 – 2020 plan for nature conversation, she asked why had the Save the Rhino Campaign gone silent. Poachers were only after the horn of the rhino. How much was SA losing when rhinos were killed by poachers? If rhinos died naturally or by means other than poaching, what happened to the horns?

Mr Phillips said that figures were not broken down into racial groups. Everyone other than white was classified as black. From 2009/10 to 2011/12 there was a drop in black domestic visitors to parks. SANParks had adopted a non alcohol policy in its public areas and it could be that the policy affected the day visit turnouts. He noted that there was a strategy, that is, five-year park management plans. The issue of poaching had not been sidelined, it was hot on SANParks’ agenda. Rhino horn was considered more valuable than gold. Rhino poaching was a huge challenge but there was a national project dealing with the issue. Poachers were willing to risk their lives to obtain rhino horn. When a rhino died, the horn would go into a stockpile. The stockpile had a huge value which if sold, the proceeds should go back into tourism and conservation.

The Chairperson asked what SANParks’ relationship with the National Department of Tourism and SA Tourism was. How did SANParks encourage synergies?

Mr Phillips said that he attended Ministerial Members of Executive Committees (MinMECs) and Ds Songelwa attended Ministerial Technical Committees (MinTECs).

Mr Farrow asked whether SANParks paid a tourism levy to SA Tourism. Who did SANParks’ marketing?

Mr Phillips answered that SANParks did meet with SA Tourism but they had never done SANParks’ marketing. SANParks marketed itself. The levy that would have been payable to SA Tourism for marketing was rather invested into community issues

Mr Shah asked if SANParks had memoranda of understanding (MOUs) with its counterpart in Mozambique.

Dr Songelwa responded that the benefits and challenges of MOUs were contextual. In the Richtersveld, SANParks had a treaty with Namibia. In the Drakensberg there was a treaty with Lesotho.

The Chairperson emphasised that communities around parks needed to be developed. These same communities needed to be taken on board to assist with issues such as poaching. Poaching was difficult since rangers themselves were sometimes involved. The Committee nevertheless recognised the efforts of SANParks.

The meeting was adjourned.

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