Implications of 2015 State of the Nation Address for Tourism: briefings by Committee Content Adviser and Researcher

Meeting report

Analysis of the 2015 State of the Nation Address - Implications for Tourism
The Committee Researcher, Ms Joyce Ntuli and Committee Content Adviser, Dr Sibusiso Khuzwayo provided an analysis of the State of the Nation Address 2015 on implications that it had for the tourism industry.

Ms Ntuli took lead on the presentation. She provided a brief overview of tourism figures. She noted that current unemployment figures had dropped from 25.1% to 24.3%. It was a slight improvement. Tourism made a 3% direct Gross Domestic Product contribution to jobs in 2013. A total of 645 000 jobs had been created. In 2013 travel and tourism investment amounted to R56.8bn which accounted for 8.6% of total SA investment. She continued by highlighting areas of significance in SONA 2015 and commented on what the current status in tourism was.

To prevent repetition Dr Khuzwayo made inputs where appropriate.

Resolving the energy challenge - It was a serious concern to the tourism industry. A need existed to review responsible tourism manuals that were out there. The Lilizela Awards rewarded establishments for embracing responsible tourism, that is Hotel Energy Solutions. However to be a participant in the Lilizela Awards the establishment had to be graded. The Minister of Tourism had also spoken about the use of more energy wise solutions. This was where many Small Medium and Micro Enterprises (SMMEs) fell short. She felt that perhaps the Committee could look into the matter.

More effective implementation of higher impact industrial policy action – This was addressed in terms of Tourism Incentive Programme (TIP) versus the Tourism Incentive Fund (TIF). The TIP was an NDT initiative had not been finalised as yet. Dr Khuzwayo added that the TIP was a contentious issue. How could the TIP be improved? What categories of business would benefit from it? The Committee had requested to see the TIP’s concept document which was still not forthcoming. The TIP was earmarked for launch on the 10 March 2015. Unfortunately the NDT was only scheduled to brief the Committee on the TIP after the launch. The TIF had been a Department of Trade and Industry imitative and in 2012 it was moved to NDT. She was not sure whether the TIF had collapsed under NDT or whether it had taken on another form.

State procurement from SMMEs appropriate categories - Ministers were encouraged to use graded establishments especially those owned by previously disadvantaged persons. There was to be adherence to the 30-day service provider payment period.

Unlocking potential for SMMEs, cooperatives, township and rural enterprises - The TEP supported programmes on skills and business development. The TEP was however intended to come to an end. She stated that she would check on what its status was on the way forward. The TIP also was a Programme which tried to ensure that there were no barriers to entry for upcoming businesses.

Skills development and the youth incentive programme - The President had said that it was doing well. There were tourism and hospitality programmes in place that spoke to skills shortages. The NDT needed to provide the Committee with information on what the uptake by youth of these programmes were. There needed to be a balance between what was on offer course wise and what the industry needed. The NDT needed to play the role of facilitator.

Prioritising visa regulations review - The Minister of Home Affairs confirmed that the kick in date for the visa regulations remained the same, that is 1 June 2015. There were plans in place to increase the number of processing centres in countries like China and India. She not too sure what the way forward specifically was given that there were conflicting views on the review of visa regulations.

Dr Khuzwayo added that the President had commented that private sector was pleased that the visa regulations were to be reviewed. The issue was being discussed at cabinet level as well as by the Departments of International Relations and Cooperation, Home Affairs and the NDT. He felt that the Chairperson should engage the Minister on the issue of visa regulations so that the Committee could be informed as to what the current situation was.

Encourage private sector investments - The private sector mainly invested in urban cities as that was where business was found. There needed to be incentives for investment in rural tourism infrastructure. There was also a need to revive the domestic tourism market.

Labour issues (workplace conflict and Minimum Wages Bill) - Minimum wages for the hospitality industry was introduced in 2002. The Committee needed to check on whether the industry was participating on the Minimum Wages Bill. The NDT needed to look into the issue of the hospitality industry employing a great deal of foreign nationals.

Operation Phakisa Oceans Economy - Dr Khuzwayo said that the NDT needed to be innovative on how Operation Phakisa could benefit tourism. SA’s coastline was huge and opportunities did exist. Its tourism potential was not being maximised. Countries like Kenya and Australia were way ahead of SA. SA lacked world class beach resorts. Ms Ntuli stated that cruise tourism was another opportunity which needed to be tapped into. The NDT had felt cruise tourism not to be a viable option to pursue. This stance needed to be reconsidered. Shark cage diving permit accessibility from the Department of Environmental Affairs needed to be addressed.

Transport and tourism – Ms Ntuli pointed out that there was poor road infrastructure in certain areas of tourism significance. Tour operators’ permit processes were riddled with corruption coupled with huge delays. SA’s Airlift Strategy needed to be looked at. There was an air connectivity issue prevalent in Africa. Dr Khuzwayo suggested that small tours be packaged to boost low cost airlines. Domestic tourism was also needed to be boosted. The Committee should check on how SA Tourism was implementing its Domestic Tourism Fund. An open skies policy in Africa needed to be taken seriously. The Yamoussoukro Declaration (YD) had after all been signed by African Union states. The YD objectives should be placed on the agenda of the African Union. He suggested that perhaps parliament could place it on the agenda of the AU.

Fight against corruption - She said that Expanded Public Works Programmes (EPWP) had been better managed. The Committee should look into the SA Tourism audit query. Many of the EPWP cases were still pending and sub judicae.

Back to basics programme - The President had stated that highly skilled persons needed to be employed in tourism. Problems that prevailed were the lack of maintenance of recreation facilities in many local municipalities, no reprioritisation of tourism funding in struggling municipalities and lack of skilled personnel. 

Recommendations
In conclusion recommendations were made to the Committee, parliament, the NDT and SA Tourism. Some of them included:
-  After the enactment of the Tourism Bill, the NDT needed to revise the 2020 targets set in the National Tourism Sector Strategy (NTSS) and project them for 2030 to align tourism with the National Development Plan (NDP).
- The Committee needed to engage the Department of Economic Development to ascertain the roll out of the youth employment incentives and how tourism would benefit from the initiative.
- The NDT needed to present their role and how they would ensure and align programmes of the NDT for the attainment of goals set in the SONA 2015.
- The skills challenge called for a dialogue between the NDT, Department of Basic Education, Department of Higher Learning and CATHSSETA on determining appropriate curriculum that would improve tourism education.
- Continued effort on ensuring transformation of the industry was required as there were positive spinoffs from transformation.
- Parliament needed to continuously agitate for intergovernmental relations with sister departments and other spheres of government.
- Regulations for the Tourism Act had not been drafted and parliament should treat it as a priority in order to assist in the flow of programmes in the NDT.
- Parliament needed to conduct extensive oversight over the implementation framework of the Tourism Incentive Programme.
- SA Tourism and the NDT needed to intensify marketing initiatives locally and abroad and consider all market segments in order to sustain the growth trajectory in tourist arrivals.
- Parliament should continue to engage the NDT on measures being employed to promote cultural tourism and what developments were in attracting investors for infrastructure developments in rural areas.
 
Discussion
Mr J Vos (DA) referred to the upcoming local government conference and remarked that with talks taking place regarding responsible tourism and bringing local tourism into the green economy the point should be brought up about retrofitting accommodation places in line with the aforementioned principles.  The principles should form part of the local government toolkit. There was not enough emphasis that municipalities had to encourage the retrofitment of places of accommodation. He noted that Grandwest Casino was one of the first places in the City of Cape Town Metro that was retrofitted. He was relieved that the issue of the visa regulations was being dealt with by an inter-ministerial committee which the Deputy President chaired. The tourism industry had called for more biometrics on arrivals. He also welcomed the R11bn that had been allocated for infrastructure development upgrades. The emphasis should be more on rural tourism. He felt that the National Department of Tourism should act as lead department to guide the Department of Transport on where the rural roads were that needed upgrading.
Referring to Operation Phakisa he noted that greater emphasis should be placed on the opportunities that cruise tourism had. Cruise tourism was an issue which he felt that the Committee should discuss in 2015. Cruise tourism should form part of the National Tourism Sector Strategy (NTSS). There was a review of the NTSS on the books in any case. He pointed out that the City of Cape Town had done research on cruise tourism and there were five important points which he wished to communicate to the Committee at a later time. Speaking to the back to basics programme and the Local Government Toolkit the possibility of developing resources along beaches should be looked at. Many municipalities already had resorts. He stated that the NDT needed to present the Committee with an audit of resorts that was out there at present in order to prevent duplication.   

Dr Khuzwayo stated that the biometrics on arrivals issue needed to be discussed by the Minister and his counterparts. 

Mr A Whitfield (DA) felt that Operation Phakisa was too soft on coastal tourism. The Committee should perhaps receive a presentation on Operation Phakisa. The Committee needed to find a way to make coastal tourism a prominent feature under Operation Phakisa. The Committee furthermore needed to get an analysis regarding potential conflict on coastal tourism and Operation Phakisa. 

Dr Khuzwayo explained that on paper tourism looked good but the reality was that tourism did not have sufficient funding. He pointed out that 75% of tourism’s funding went towards marketing and the remaining 25% was what the NDT could work with. There were good policies in place but the NDT needed to lobby National Treasury that if tourism was expected to create jobs then tourism funding needed to increase. National Treasury could counter the argument by asking whether the NDT was articulating correctly and whether implementation was taking place.

Ms P Adams (ANC) pointed out that as early as 2002 there were documents dealing with responsible tourism. Examples were the Cape Town Declaration and the Responsible Tourism Manual for SA. She felt that these documents should be revisited, given the energy crisis that SA was within. She felt that SA needed to develop its own energy model. She asked that members be provided with the European Hotel Energy Solutions E-Toolkit. Mr Khuzwayo and Ms Ntuli were urged to come up with recommendations on the Energy Toolkit which the Committee could forward to the Committee. It was all good and well that Operation Phakisa was addressing the development of the ocean economy but she asked what development was going to take place regarding small Westcoast towns in the Western Cape. Tourists need to be attracted to the small rural towns and not only resorts. On the granting of licenses to ocean recreational facilities there was a need to focus on small players as well. Opportunities should exist for the small fisherman to take tourists out to sea as. She emphasised that the NDT should have a holistic approach to domestic tourism especially in rural areas. She said that towns like Carnarvon needed upliftment as it was of great astronomical interest. Provinces could not be only depended upon to uplift towns.  National government should come on board as well. If it was correct that in 2013 tourism created 645 000 jobs, were they permanent jobs and how many were casual jobs. Had the NDT identified which skills were lacking in the industry? Was it possible for an audit to be done of all graduates in the tourism sector that were unemployed? She asked why the NDT had abandoned the concept of cruise tourism in SA. What had made them come to the conclusion that it would not be feasible?

Ms Ntuli responded that the 645 000 jobs were permanent and semi-permanent jobs. These were direct jobs in the tourism industry. The ranking of SA in terms of contribution to employment was position 86 out of 184 countries in the world. SA was even surpassed by countries like Lesotho, Namibia and Kenya. She said that it was best that the NDT communicate with the CATHSSETA and the Department of Higher Education on what the skills were that were needed in the tourism sector.  She noted that there was a saturation of jobs in certain sectors in the tourism industry. The NDT had done a skills audit in 2012/13 but the results were not too conclusive. The Chefs Training Programme had 800 graduates. Ms Ntuli said that she was not sure whether the NDT would be continuing the Programme or looking at providing training on other skills.

Dr Khuzwayo said that the discussion on responsible tourism had started in 1996 with the introduction of a White Paper. A strategy was only introduced in 2011. By that time cities in SA had their own manuals on responsible tourism. Essentially there were pockets of good manuals on responsible tourism that could be bumped up to national level. Two provinces which had good manuals were Gauteng and the Western Cape. At present responsible tourism was done on a fragmented basis. Tourism needed to be mainstreamed. On creating more jobs by issuing more licenses it meant that more persons had to be trained to be able to captain boats and more life guards needed to be trained. He agreed that there were opportunities to create jobs as Operation Phakisa intended.  The NDT would be doing a skills audit again. Industry was of the opinion that tourism graduates needed to be retrained. He explained that the NDT had abandoned the concept of cruise tourism as they considered it to be outbound tourism. Cruise ships supposedly took its passengers elsewhere to spend their money. He was of the opinion that cruise tourism should be considered as inbound tourism as the ships docked at South African ports. The issue was about what was being done to take advantage of the huge amount of tourists coming in on cruise ships. The NDT and SA Tourism had to come up with something to take advantage of the opportunity.

Mr S Bekwa (ANC) felt that the launch of the Tourism Investment Programme (TIP) without input from the Committee was not correct. 

The Chairperson noted that Ms Ntuli and Mr Khuzwayo might not be able to answer all the questions asked by members as many questions needed to be directed to the NDT. She said that the NDT needed to inform the Committee as to what they had in the pipeline to promote coastal tourism that was in line with Operation Phakisa. She requested Ms Ntuli to do some research on the European Toolkit. The Department of Home Affairs (DHA) had confirmed that the visa regulations would still kick in on the 1 June 2015. The DHA was working on increasing the number of processing centres. The question was whether the DHA would have the required capacity. She was not convinced that SA Tourism had done justice in promoting domestic tourism. If Kenya could do well on domestic tourism how could SA not do well? The Committee would be briefed around the issues of chefs by persons in the hospitality industry. 

Tabling of the Committee Oversight Report to Pretoria 2014/15
The Committee tabled its Oversight Report.

The Chairperson informed members that the Committee had been invited to the launch of the NDT’s Tourism Incentive Programme (TIP).The Committee would be sending two Committee Members to the launch. Mr Vos and Ms Makhubele-Mashele (ANC) would be attending on behalf of the Committee.

Mr Vos felt that there was no need for Members to attend the launch. He felt it to be a waste of the Committee’s funds.

The Chairperson shared Mr Vos’ sentiments and the Committee agreed that it was not necessary to attend the launch.

The meeting was adjourned.