Department of Tourism on its 2014 Strategic Plan

Meeting report

The Chairperson announced that the Minister of Tourism, Mr Derek Hanekom, and the Deputy Minister, Ms Tokozile Xasa, had tendered their apologies as they had to attend a Cabinet meeting. He noted that the Wednesday meeting date may need to be altered due to the clash with Cabinet meetings, so as to accommodate and engage formally with the Members of the Executive.

Department of Tourism on its 2014 Strategic Plan
Director General, Ambassador Kingsley Makhubela introduced his delegation: Mr Victor Tharage, Deputy Director General: Policy and Knowledge Systems; Ms Morongoe Ramphele, Deputy Director General of Domestic Tourism Management; Ms Anneme Malan, Deputy Director General for International Tourism Management; Ms Hannelie Theron, Acting Chief Director for Communication; Mr Ralph Ackerman, Chief Financial Officer; Ms Nomzamo Bhengu, Chief Director: Governance Support; Mr Dirk van Schalkwyk, Chief Operating Officer. He indicated the Department’s commitment as management, to work with the Select Committee. The Director General explained what the responsibilities of each of the Department of Tourism’s four branches: Administration, Policy and Knowledge Services, International Tourism Management, Domestic Tourism Management. He explained that the International Tourism Management programme identifies policy imperatives required to attract the one billion tourists travelling in the world in order to obtain fair market share. This requires analysis to develop appropriate policies. Most stable markets are anchored on the domestic tourism market and he gave as an example, China. Domestic tourism is important and this is where DOT co-ordinates with local and provincial government. The South African domestic tourist branch (SA Tourism) dealt with the marketing function while the international tourist branch dealt with policy formulation although there are areas of synergy between the international and domestic branches.

Seventy-five percent of the Department’s budget is transferred to the marketing function. DOT currently funds 544 posts and has 97 unfunded posts. The Department aims to fund previously unfunded posts, as they are required for the Department’s restructuring, particularly the International branch’s expansion. The Department needs to step into the international sphere as the projected growth from 2014 to 2030 is 1.8 billion people travelling. This requires development of concrete policies, to gain a better market share of these 1.8 billion people travelling around the world. The Director-General handed over to Ms Nomzamo Bhengu who evaluates and monitors the Department’s performance. She is referred to as the Department’s “chapter nine institution”, acting independently, providing detailed analysis of performance and risk within the Department.

Ms Nomzamo Bhengu, DOT Chief Director: Governance Support, outlined the vision, mission and values of DOT. This financial year, the planned policy initiatives are in line with the Tourism Act of 2014. Their goals are aligned with government outcomes, regarding administration and how public resources are utilised. The aims of the Administration branch were:
▪ to achieve and ensure good corporate governance by providing comprehensive corporate services to DOT;
▪ to integrate tourism priorities within the private sector so the tourism agenda is recognised by all stakeholders;
▪ to improve the level of competitiveness and sustainability in the Tourism sector, this includes promoting a culture of responsible tourism and best practise;
▪ to improve the tourism sector knowledge services and strengthen regional Africa, international collaborations and partnerships to drive South Africa’s tourism agenda.

Its risks had been assessed: The key risk is the availability of IT infrastructure and systems; Failure to comply with performance management guidelines; Financial risks require management to ensure resources used are not misappropriated; Non-compliance with Tourism guidelines and regulations. Other risks that the Department is conscious of are that: If international tourism agreements are not monitored, use of those platforms to drive its agenda may be impacted. With domestic tourism, if government spheres are not aligned with the Tourism agenda it may defeat the Department’s intention of domestic tourism growth in South Africa. Theft, fraud and mismanagement of funds are a real threat. Each line function ensures relevant mitigating actions to address these concerns.

Administration programme
Mr Dirk van Schalkwyk, NDOT Chief Operating Officer, explained the programme’s mandate. Its function was to provide executive support in corporate affairs, organizational performance management and effective coordination and management systems. The oversight of South African tourism is vested in this branch. We have developed specific protocols and service charters to ensure a specific turnaround time, and that labour cases are documented and monitored. In respect of complaints, the new Act has created a specific section dealing with tourist’s complaints and the Department has set up a proper mechanism to deal with complaints.
 
The Department aims to provide capable and skilled workforce and higher standards to drive universal accessibility with a minimum of 50 percent woman and 5 percent disability. Its BEEE expenditure has been lifted to ensure compliance with the Act. It provides an effective internal audit, ensuring a 100 percent compliance and its communication strategy complies with the government’s mandate.

Policy and Knowledge Services
Mr Victor Tharage, Deputy Director General: Policy and Knowledge Services, said this programme deals with sector policy, research and knowledge developments, evaluation, promotion of transformation within the sector and responsible tourism. Their policy work and integrated planning aims to train local government officials and policy makers within tourism. In February 2015 it will also host a local government conference. Other work is aimed at developing policy primarily to regulate tourist guiding. In the promotion of responsible tourism and best practices, with the provinces, they are attempting to identify the extent that people with disability are able to access provincial parks; they will compile a report to inform what they do going forward. In terms of the National Tourism Strategy, they will report on its implementation and the state of Tourism in general.

They are researching the following projects: the sustainability of tourism facilities, in terms of knowledge management they are creating a visitors database and a tourist guiding database. Another project is the development of information gateways, where information centres at ports of entry assist tourists to find information about the country. They currently have one information centre at Oliver Tambo Airport. They have a memorandum of understanding with five universities researching: service excellence, impact of events and religious tourism. They will be releasing the draft alignment between DTI generic codes of good practice for BEEE and this should be completed and implemented in May 2015. They are considering enterprise development, such as the feasibility of creating a database of small suppliers, who could work with big business catering for tourism needs in procurement.

International Tourism Management programme
Ms Anneme Malan, Deputy Director General: International Tourism Management, said this programme has three objectives aimed at increasing the contribution of the Tourism sector in economic growth, specifically the GDP and job creation.
▪ To consider the international tourism market and inform strategic interventions, specifically research based information. Under this they consider plans that will unlock potential, such as sport tourism, market penetration in America, strategic integrations in a number of counties where there is potential they can unlock.
▪ To deal with initiatives to institutionalise tourism in South Africa’s missions abroad so they are working closely with Department of International Relations and Cooperation (DIRCO) and all missions abroad. The aim is to promote South Africa as a preferred tourism destination, in essence institutionalise and build capacity. They plan to continue DIRCO work, with diplomacy training of officials and in foreign languages. The aim is to reduce barriers and enhance competitive growth of tourism, and create proactive policy development. They assess South Africa’s potential as an aviation hub in the southern corridor to enhance tourism.
▪ To look at bilateral and multilateral engagements that they apply to enhance the tourism agenda. They link the agreements globally with national priorities, to drive them through those platforms. They consider regional integration, grading and statistics in terms of signed agreements with African countries, expansion of policy and training to up skill workers. Ministers and officials participate in various forums thus driving national priorities. Their focus is on regional integration and policy development, looking at SADC and the African Union to drive tourism through the region.

Domestic Tourism Management programme
Ms Morongoe Ramphele, Deputy Director General: Domestic Tourism Management, explained how the branch is structured focusing on provinces; they have two regions: the South and the North. The South consists of four provinces, all the Capes plus Free State. While the remainder of the provinces fall under the North region. They have an Expanded Public Works Programme (EPWP), which looks at infrastructure and training development, specifically for young people. They have an incentive programme starting this financial year. Their strategic objective is to implement tourism growth and development strategies to increase tourism’s contribution to inclusive economic growth. The National Tourism Career Expo (NTCE) is geared to attract learners to the Tourism sector. This normally runs three years within each province. They also share information with educators dealing with hospitality and tourism. This ensures that the correct information is provided to learners. At the same time they have a partnership with Umalusi and SETA, to assess the curriculum and to train students according to industry needs. They host Tourism month, which they celebrate annually in September. Tourism month will be hosted this year in the Northern Cape where they impart information on the six less visited provinces. In addition, provinces do their own mini tourism month.

They have a standard of service excellence created in 2012, to encourage the return of tourists. They are currently piloting in Upington, allowing everyone in the service chain to be involved and understand service excellence issues. Their strategy deals with other issues, such as research, up skilling and public awareness. The aim is to develop a tool whereby entities are able to evaluate whether their service levels comply with industry standards and if not, to improve this. In 2012, when they started applying the new structure, they profiled each province in order to understand the potential within their respective areas creating support packages to assist the provinces. They have been providing capacity building in poverty areas to create a platform for businesses and the municipality to engage. Last year they assessed the eight world heritage sites – a strong concern was the unclear signage and interpreting what is within those sites. This year they will be assisting four sites, to come up with interpretive signage. They have a new incentive programme that will be launched this year, where they look at market access for established and emerging entities. They have categorised them according to those in the international and domestic sphere. They still have a partnership with the Tourist Enterprise, where they assist in capacitating previously disadvantaged entities. Their EPWP aims to create 4079 jobs for 2014. These figures are inclusive of training within industry.

Budget presentation
Mr Ralph Ackerman, Chief Financial Officer, said DOT’s budget is R1.6 billion. Administration is budgeted at R2.8 million, policy and knowledge services are allocated R925 million (inclusive of transport), international tourism R519 million and domestic tourism R463 million, inclusive of social responsibility implementation (SRI) projects and incentive programmes. He indicated that the compensation of employees is 14%, and goods and services is 8%. In an ideal world the compensation of employees, and goods and services should be a ratio of 1 to 1, while their goods and services is much lower. Their transfer payments are R1.2 billion. Their social responsibility implementation and expanded public works programme is R359.9 million. The tourism enterprise programme with strategic partnerships is allocated R23 million.

Discussion
Mr L Suka (ANC; Eastern Cape) indicated that he attended the last Tourism conference in Port Elizabeth, where the former minister and deputy minister were in attendance. He appreciated the presentation and DOT’s contribution plays a significant role for the GDP of South Africa. He requested that the Department improve on advocacy. There is huge potential in the areas surrounding the coastal line and efforts should be made to educate the nation about the importance of this Department. In the presentation a programme for learners was mentioned, he suggested that this should cut across South Africa and that the Select Committee members have the tools to assist. Learners lack information about access, this is what he means about advocacy. On the eight world heritage sites, he asked for more clarity be provided on the chosen four sites. In terms of advocacy, the rural areas should be assisted with access. Many rural projects are created to attract tourists but that do not have exposure. He was concerned about how informal enterprises obtain exposure and access to the Department’s products. He valued the DOT’s partnership with Umalusi and requested a breakdown of the Department’s impact within the nine provinces on tourism. He assumed that the Tourism Department works closely with the Department of Transport, as rural people are always disadvantaged in terms of mobility. He encouraged the focus on promoting local tourism as local tourism has declined and there are poor roads, how does the Tourism Department interact with satellite offices to improve strategy?

Ms E van Lingen (DA; Eastern Cape) said the presentation indicated that tourism stats have decreased, and requested that reasons be provided for the decrease. She was under the impression that one international tourist created eleven jobs. What were the reasons for the decrease in job creation. Another concern is DOT’s risk management which fails to account for the influence that other departments have on tourism and must be included in its risk management. She was interested in the complaints section; how many complaints are there, how would you categorise them and improve? She noted the 100% target for PDS, is that a weighted or stretched target. With reference to selection and training at local municipalities, it is important that the Local Tourism Organisations (LTOs) are involved and those trained will develop further within Tourism; she requested information on the funding structure. She commented that in the provinces, environmental affairs and tourism are usually one portfolio and requested the Department to clarify.

On tourism sector codes, she asked how far the process is and its risks. In terms of heritage sites, she agrees that more information needs to be provided on the location, what is happening around those sites and how can NDOT assist local communities and provinces to expand on tourism around those sites. On the division between North and South, she suggested a better division would be the four coastal provinces and other non-coastal, because coastal provinces have similarity in tourism. She request guidance on the current divisions. The Umalusi curriculum is a wonderful step forward to standardize tourism. On social responsibility implementation, could the Department elaborate further, providing projects facts. Due to its high expenditure, this information is necessary in terms of the Select Committee’s oversight function.

Mr B Nthebe (ANC; North West) referred to the presentation’s discussion on empowerment. He assumed that the aim was to bring in an element of the National Development Plan. The presentation includes training and development skills but what are the realities at play. The reality in the tourism industry is that the majority of the people cannot transfer skills because they are not registered and not South African citizens, which the report does not appreciate. If we want inclusive growth, in line with what the NDP seeks to achieve and to ensure inclusion of the young people of this country, this needs to be addressed. There seems to be no international tourism management, and requested more information and clarity and asked for more information on what DOT is currently doing. He referred to the non-compliance with immigration regulations, and the discomfort with their current configuration in Home Affairs. He referred to the market penetration objectives that DOT seeks to achieve, how does this link to Home Affairs moving forward regarding people who purport to be tourists but do not leave the country and those engaged in criminal activities. How does Home Affairs link to tourism, in order for the tourism market to flourish and for legislation and laws to be adhered to. His next concern was who is being incentivised and has this responsibility shifted to Minister of Small Business Development, Lindiwe Zulu, or will it remain with Tourism? He was concerned with the local content aim to be achieved by the Department and how they move forward with this. What initiatives are put in place so resources can be tapped in other areas of the provinces?

Ms M Dikgale (ANC; Limpopo) agrees with Mr Nthebe. The presentation indicated the creation of 4000 jobs – are they permanent or temporary? Can DOT clarify the grants given to boost municipalities and provinces. She requested more information on its planned policy initiatives. The Department will have their positive support.

The Chairperson thanks the Department of Tourism for the presentation. He apologised for the time constraints. He proposed that the Department address the questions they consider the most important. The unanswered questions may be addressed at another time because today’s priority is the Budget Vote.

Mr S Mthimunye (ANC; Mpumalanga) suggested that if a legacy report was provided on the previous strategic plan alongside the new one, it would assist in understanding the Department’s progress and what is planned for the financial year. For the purpose of next week’s meeting, he requested that DOT indicate how many international and domestic tourists they have, if these figures are changing and provide reasons. He requested DOT elaborate on the overall contribution of tourism to the national economy and job creation in general.

Mr Y Vawda (EFF; Mpumalanga) was concerned with the division between international and national tourist. He suggested rather referring to them as international, domestic and local (from surrounding areas) tourists. He referred to the term ‘tourist’ and presumed DOT was referring to the holiday maker. In reality, most of South Africa’s visitors come here for business purposes, specifically in Johannesburg. How do they target the business visitor? The business visitor was likely to return with his family on a holiday and increase expenditure, thus creating jobs. He agreed that there is a problem with signage information. South Africa has very poor signage. To encourage international tourists, there needed to be clear directions, information and support across the board at grassroots level. His next issue was about halaal tourists. In 2011/12 30 billion dollars was spent by so called halaal tourists. These are people from Middle East, North Africa, India and so on who require special catering for their special dietary requirements and one should target these areas.

The Director-General indicated that DOT has appealed to the National Council of Provinces and National Assembly when dealing with EPWP projects to remove political bias because poverty in South Africa has no political limits. As public servants, the Department wants to address poverty with respect to the entire South African population. On EPWP projects, they appeal to the Select Committee to focus on oversight and assess the impact in order to achieve progress. On the definitions of the domestic and international tourist, universal standard terms are applied, as used by the UN and WTO. The definition of who constitutes a ‘domestic tourist’ – this was classified as someone who spends 48 hours overnight in an area and who was at least 48 kilometres away from where he permanently resides. The ‘international tourist’ was anyone who comes from outside the border. The definition includes the leisure and business tourist. These definitions are reflected in StatsSA figures. On the questions about a decline in international tourists, he said that it takes three years to obtain more accurate results as StatsSA figures indicate the number of arrivals are 13 million and international tourists are 9 million. International arrivals include in-transit passengers. The DOT is now migrating to the international specific definitions of tourists as the Tourism Satellite Account provides a true reflection of the tourism industry [by which the economic aspects of tourism can be drawn out and analysed separately]. Domestic tourists contributed R105 billion and international tourists R98 billion. As a Department in the domestic sphere they barely contribute. Their aim was to invest in domestic markets next year. Most of the facilities in the country provide causal work and if they strengthen domestic tourism, permanent jobs will be created and thus marketing was needed. DOT aims to create no new policy initiatives next year but concentrate on implementing the current policies, the exception being the new Tourist Act. There are sufficient policies in place and as a department they need to focus on implementation. They are cognisant of the new principles, and where changes are required, they will implement such changes. On the world heritage sites, he said DOT has developed a DVD on world heritage sites intended to market South Africa on South Africa’s mission websites and for the purposes of study. Signage was a problem and they are working on this at the four heritage sites. On complaints that the new Act should recognise that the consumer ombudsman deals with consumer complaints, he said that due to the urgency of international claims and the reputational damage that arises in failing to respond in a timely manner, they cannot rely solely on the ombudsman. DOT in line with the Act has created a Complaints Officer, who deals with complaints to ensure feedback is given to tourists. He said that meetings will be held with the Minister of Home Affairs to deal with problems that have arisen.

Mr Tharage responded to the question on BEEE codes of good practice alignment, saying DOT would do a presentation at a later stage. On the municipal parks research, it does not include environmental issues. Their focus was to determine whether the tourism facilities are being utilised, in order to develop best practice and resolve challenges. On the question on the training of municipal workers, the proposition was to include local tourism associations but the focus was currently on municipalities, in order to enhance the capacity of people employed in the tourism sector. They provide training and content to policymakers in the municipality through universities.

Ms Ramphele responded to the question about the 40 000 jobs, saying they are not permanent. To provide more information on the heritage sites, they have strategies for rural tourism. On incentives, there were criteria to distinguish between established and emerging enterprises in terms of revenue, they aim to provide mentorship and support training to emerging enterprises.

The Director General indicated that a huge problem was the deteriorating infrastructure in the municipalities. Roads are disappearing, they are no longer accessible and facilities are shutting done because of this basic maintenance that was required. He appealed to the Select Committee to identify, provide leadership and do oversight on these problems because tourism depends on infrastructure. Without mobility, they have no tourism.

The Chairperson made three general comments. First, there was a general acceptance by Parliament about the need to determine how they can have a better impact on our people’s needs, there was a need for activism and to recognise that Parliament was not there for simply processing policy. People want to see that democracy benefits them. Secondly, the members of the National Council of Provinces are accountable to their provincial legislatures and this platform was an opportunity to engage on issues that relate to the provincial legislatures. Finally, the Select Committee meeting today with DOT was part of a process and they agree to explore a mechanism for continuous engagement. This Select Committee has the same members as the Select Committee on Economic Development, and from their engagements here, they can take cognisance of the valid transport concerns that have been raised with which there are other departments which can assist. He concluded that the Select Committee values the information shared and feels equipped to present the Budget Vote next week.

The Department left and the Committee discussed the Budget Vote debate that would take place the following week and the allocated time for each speaker.

The Committee adopted the minutes of the previous week’s meeting.
 
Meeting adjourned.