South African Tourism on its Strategic Plan 2015-2020


20 March 2015
Chairperson: Ngcobo, Ms BT
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Meeting Summary

A delegation from South African Tourism (SAT) presented a briefing to the Committee on its vision, mandate and governance, as well as its strategic objectives and performance measurements up until 2020. SAT hopes to raise the number of annual tourist arrivals in the country from 9.6 million in 2013/14 to 13.7 million by 2020, and also to raise the total tourism sector’s revenue contribution to the economy from R99.4 billion in 2015 to R155 billion by 2020. SAT also aims to boost domestic tourism in terms of domestic holiday trips taken from 3.1 million in 2013/14 to 3.5 million by 2020. The Tourism Grading Council of South Africa (TGCSA) will work with SAT to boost the number of graded establishments from 5587 in 2013/14 to 9738 by 2020. SAT suffers currency losses due to the depreciating Rand and conducting much of its business in foreign currency, and plans have been put in place to prevent this in the future. The Chief Convention Bureau Officer presented the successes and strategies of the South African National Convention Bureau (SANCB). The SANCB has secured 177 bids for the period 2015-2020, with an estimated economic impact of R3.5 billion. In the 2015 financial year, 45 bids with an impact of R1.5 billion have been secured. The Regional Director of leisure tourism in Africa said SAT is focusing more and more on attracting African and South African tourists to visit South Africa. SAT offices have opened in Lagos and more will open soon in Angola. Domestic tourism will be boosted, as its budget will increase from between R25 million to R35 million to R100 million in the next financial year. Initiatives like Sho't Left will be evaluated and more domestic tourism initiatives will be implemented, such as a Madiba smartphone app that encourages travel to various parts of the country. SAT will work with key stakeholders, such as municipalities, in the future in order to develop the product of tourism in South Africa to a high level.

Members said that in general SAT is an important initiative and that it is doing a good job. Members said that the figures for domestic tourism targets are low and that they indicate a lack of faith in the potential of this market. SAT explained that its targets are based on the most recent data which indicates that domestic tourism has been decreasing. Members also said that SAT is not working enough directly with local governments to collaborate on tourism. SAT said there is a marketing working group with various provincial CEOs and representatives of other entities that is working to stem this decline. Members said that the airlift problem that South Africa is facing, with SAA discontinuing flights from Beijijng at the end of March, is serious and that SAT should communicate with the Department of Tourism, with which SAT agreed. It was pointed out that the Qunu Museum is in a poor state and is a disgrace to the legacy of Madiba.

SAT and the Committee agreed that the domestic tourism concerns, including clarity about the SAT's Madiba app strategy, will be discussed in future meetings. The airlift issue and SAT’s collaboration with other governmental entities will also be further discussed.

The Committee decided that it should have a meeting in the future with the Director General of Home Affairs to discuss visa regulations.

Meeting report

South African Tourism (SAT) on its Strategic Plan 2015
The delegation from SAT included Mr Zwelibanzi Mntambo, Chairman of the SAT Board; Mr Dirk van Schalkwyk, National Department of Tourism (NDT) Chief Operating Officer and SAT Board Member; Mr Tom Bouwer, SAT Chief Financial Officer; Amanda Kotze-Nhlapo, Chief Convention Bureau Officer; Ms Evelyn Mahlaba, Regional Director of Africa of CMO Leisure, Tourism Marketing – Africa and Domestic; Mr Graham Wood, Chairperson of the Tourism Grading Council of South Africa (TGCSA); Ms Stembiso Dlamini, SAT Chief Operating Officer.

Mr Zwelibanzi Mntambo, SAT Board Chairperson, explained the alignment of the SAT planning approach. The National Development Plan (NDP) and New Growth Path work together with the Medium Term Strategic Framework and other medium and long term frameworks to determine SAT’s strategic plan. The vision of SAT is to make South Africa one of the most preferred tourist destinations in the world and maximize the economic potential of this sector. This will be achieved through implementing strategies informed by research at all levels. Recognizable and respected quality assurance will continue to be a priority, as well as the alignment of efforts of different government entities and efficient utilization of resources. SAT’s expanded mandate means that it will need to deliver against the National Tourism Sector Strategy in order to enhance the economic contribution of the tourism sector through innovative strategies. These strategies are to:
-invest only in selected markets to deliver volume and value
-convince consumers and clients of the value of business and leisure tourism in South Africa
-engage stakeholders to deliver quality visitor experiences at all levels
-work the distribution channel to promote SA
-set up regional hubs to increase market penetration
-energise and empower the organization to innovate and achieve excellence.

Mr Dirk van Schalkwyk, NDT Chief Operating Officer, introduced the strategic outcome oriented goals of SAT, which center on increasing the tourism sector’s revenue contribution to the economy from R99.4 billion in 2015 to R155 billion in 2020. Other goals are to:
-contribute to the growth of tourist arrivals from 9.6 million in 2013/14 to 13.7 million by 2020
-implement a domestic marketing strategy to increase the number of domestic holiday trips from 3.1 million in 2013/14 to 3.5 million in 2020
-maintain brand awareness and improve it from 79% in 2013/14 to 86% by 2020
-provide quality assurance for tourism products, and increase the number of graded establishments from 5587 in 2013/14 to 9738 by 2020
-increase the number of business events in South Africa from 118 in 2013/14 to 134 by 2020.

He explained how SAT structures its targets into estimated performance, medium-term targets and long-term targets. It has developed a detailed set of targets for all the above goals over the next five years.

Financial matters
Mr Tom Bouwer, CFO of SAT, spoke about the large budget increases, which are mostly due to the increase of the Africa budget from R50 million to R84 million. The 2014/15 budget had no increases besides inflationary increases. The 2015/16 budget increased by R11 million again due to the Africa budget that was allocated to domestic market growth investments. There is gradual growth of the total income of the sector, but it is not substantial. SAT was one of the few public entities that did not experience a budget cut, thanks to the help of the department and the currency losses, which could disempower SAT, were avoided. The impact of currency losses on the budget was submitted to the National Treasury, showing the difference between the nominal and real budgets. The rand has depreciated greatly against the dollar from 2011-2015, with the exchange rate now at R12.08/per dollar. This has led to a 35% loss of currency in real terms. SAT consistently informs National Treasury about the effects of currency losses on its budget in order to avoid cutting down on its deliverables. Last year, SAT requested its budget allocation upfront in order to place it in stable foreign accounts in order to mitigate the effects of currency losses, which led to savings of R34 million. The same request has been made this year and SAT awaits the outcome of Treasury’s decision. If all budgets for foreign countries and foreign media are made in foreign currency, more foreign currency losses can be avoided. A re-investment budget policy would enable any saved funds or gains from foreign investment to be returned to National Treasury. National Treasury has not yet indicated whether budgets will be made in foreign currency or not, or whether there will be a re-investment budget policy in place.

Mr Mntambo again raised the importance of currency losses when paying for marketing and operating abroad. The rand’s depreciation against major currencies causes large real losses.

Role of the South African National Convention Bureau (SANCB)
Amanda Kotze-Nhlapo, Chief Convention Bureau Officer, explained that SAT’s strategy is to convince clients that South Africa can be trusted to deliver memorable experiences and successful business events. The National Convention Bureau (NCB) is focused both on bringing tourists into South Africa, as well as bringing knowledgeable specialists into the country for corporate events. The business events focused on by the SANCB refer to the MICE umbrella of corporate events, which refers to Corporate Meetings, Incentive Meetings, International Conventions and Exhibitions (trade exhibitions), which is a wider scope than just corporate meetings. Trade shows can help to develop the South African economy. The biggest potential and available data lies in Incentive Meetings, which are large meetings of corporates from around the world. These generate the most income and therefore the SANCB focuses on them to an extent.

The SANCB directly targets sectors that make decisions about where to host their events, rather than broader markets. Different locations are targeted for different sectors. For corporate meetings, SADC, Europe, USA and Asia are targeted to attract African product launches of multi-national companies’ products. This sector has limited potential because many launches take place in the country of the companies’ headquarters. However, regional launches of multi-national companies are often done in South Africa, especially when there are headquarters in the country. The incentive meetings market is targeted in the UK, Europe, US, BRIC countries and Asia via incentive companies, corporate agencies and in-house planners. These entities present proposals for destinations to their superiors, and they are directly targeted by the SANCB. There is strong potential in this sector, which is linked to the strength of South Africa as a leisure destination. These groups often demand high-end products, and their contribution is much larger than the other groups. Conventions are targeted in Europe, USA and Africa because this is where headquarters of SA international associations are located. There are headquarters in London, Geneva, Paris, Brussels and Washington D.C., as well as the Africa Association headquarters in Johannesburg and multiple Africa Association headquarters in Kenya.

NCB also attempts to engage with associations that align with the NDP as well as the strengths of our country and where we want to develop. In 2013, of the 12 800 international and regional associations that traveled around the world for conventions, South Africa acquired only 118, although the African continent as a whole got only 308. This represents a strong potential for growth. The trade exhibition market is targeted in South Africa, Europe and US. African product launches are targeted by SANCB for SA, and existing national shows will hopefully become international exhibitions and launches in the future. Event organizers now approach SANCB for help with bids.

The sales model for business meetings and events is a hybrid model that makes use of a Sale Representation Model as well as in-house sales teams. This is cost effective and performance driven, as the sales teams’ salaries are directly linked to the leads they bring in.

Target industries and sectors have been identified for each province, with the strengths of different areas considered in the bid-making process. SANCB has a coordinating forum that assists areas with convention bureaus with leads, bids and advertising. This means advertising and bidding efforts are more specific and focused, which leads to a more cost-effective strategy in general. The SANCB offers various support services to potential business meeting hosts, including bidding support, with a lot of research and other support offered to various businesses, from small hotels to SA’s flagship convention centers. Site inspection support services help with the bidding process, as when clients actually view the infrastructure and services on offer, more than 60% of the time they choose a South African venue. After a bid is won, SANCB offers convention planning support that includes venue and supplier recommendations that enable local South African businesses to benefit and make a good impression on international clients. SANCB offers delegate-boosting support, which is marketing of the convention to potential international delegates that takes place before the convention. SANCB also offers on site event services, which aims to give delegates and clients a good experience and impression of the country during their visit to SA. The success of these services can be seen in 40% of delegates returning to SA in the last 5 years.

177 bids have been secured for 2014 – 2020, which will have an estimated economic impact of R3.5 billion from the visits of 253 128 delegates. For the financial year of 2015, 46 bids have been successfully supported for the visit of 112 590 delegates, with an estimated economic impact of R1.5 billion.

SA improved its International Congress and Convention Association (ICCA) ranking from 37th in 2012 to 34th in 2013, and it is hoped that we can continue to improve. SA’s participation in targeted trade shows, namely EIBTM in Barcelona, CIBTM in Beijing, and IMEX in Frankfurt and Las Vegas, have generated many leads and bids. Meetings Africa is still growing and is considered a success so far, as the numbers of exhibitors, hosted buyers and African countries that participated have grown from 2013 to 2015.

Mr Mntambo said that the SANCB started during the ministerial reign of Marthinius van Schalkwyk, and that it has grown in leaps and bounds since then. This success is seen in the hosting of “mini-World cups”, such as the World Summit on Sustainable Development, conferences on climate surveying and the World Aids Conference. The SANCB also works with provinces and big cities like Cape Town and Johannesburg to offer a convincing case to win bids for large conferences with many delegates.

Domestic and International Leisure Tourism Marketing Strategies
Ms Evelyn Mahlaba, Regional Director of Africa of CMO Leisure, Tourism Marketing – Africa and Domestic, said that SAT’s strategy is to invest in selected markets that deliver volume and value. Potential leisure tourist sources are divided into core markets, investment markets, tactical markets and watch-list markets. Core markets receive the majority of resources and time from SAT. Tactical and watch-list markets receive investment for the future, to hopefully move them towards a core market classification. In servicing these markets, SAT uses a hub strategy to maximize the benefits of expending resources. Markets are classified in terms of location, and operational hubs located around the world assist with markets in their proximity across all markets.

SAT’s main marketing approach is to use South Africa’s overall global approach through three elements. The first element is to inspire people to consider travelling to South Africa by showcasing the difference of its unique product. The second is to engage with different consumers through showcasing the experiences on offer in South Africa, both in terms of leisure and business. The third is to convert people to travel to South Africa by engaging with key trade and media partners to activate travel to South Africa. The global approach for leisure tourism has been based on the MeetSouthAfrica and ReconsiderSouthAfrica campaigns, which focus on re-informing people to change their perceptions about South Africa. In mature markets especially, people are not informed about the depth of touristic offerings within the country, and these initiatives work to make people reconsider what they think they know about South Africa. These campaigns will move into various forms of media in core markets.

The approach for tourism in Africa has been prioritized and large funds have been made available for the development of African tourism in South Africa. An SAT office was opened in Lagos, Nigeria, and on the 21st April, offices will open in Luanda. There is a detailed and extensive evaluation to ensure the best operation in each individual market. The main African markets are Nigeria, Kenya, Tanzania, Ghana, DRC and Angola, although it is the goal of SAT to attract more sub-Saharan Africans through the use of multi-national media, such as DSTV. Partnerships are being set up with SAA and other African airlines to assist in the building of the SA brand in other markets.

SAT’s goal for the domestic leisure tourism market is to inspire individuals to travel by encouraging the culture of travel in our country. By encouraging the culture of travel, South Africans also become better hosts for international tourists and can engage with them as fellow tourists. This will be achieved through the further implementation of the Sho't Left campaign, which will partner with different brands and be available on new platforms to attract more people.

Mr Mntambo said that SAT’s global marketing approach is proven and generally successful. There is more work to be done in African countries, especially closer SADC countries where day trips can be targeted. However, the main struggle for SAT is that of domestic travel which can contribute greatly to the national economy. Investments in the development of this sector will hopefully pay off in the next few years with tangible results.

Planned growth for Grading Council sphere of influence
Mr Graham Wood, Chairperson of the Tourism Grading Council of South Africa (TGCSA) said that the grading council is important as an assurer of the quality of the product that SAT markets globally. The vision of the Tourism Grading Council of South Africa is to be an internationally recognized, predictable brand of high quality and enriching touristic experiences. The mission is to accomplish this by implementing a globally benchmarked system of quality assurance that can be relied upon. TGCSA regularly goes through a three-year benchmarking review, the latest of which was successfully completed at the end of 2013. The strategic objectives of TGCSA are to grade establishments on their quality accurately, and to recognize great performing establishments.

The target for the number of quality-graded establishments was not met last year, and will not be met again this year because the target was not adjusted. Initiatives have been put in place in order to grow the number of establishments up to 2020. The first of TGCSA’s strategic goals is to enhance the skills and credibility of grading assessors by changing the business model to accommodate those assessors for whom this is a primary source of income. The second is to enhance the credibility of the grading process and criteria, which has adopted the scoring system of the UA grading criteria. The third is to ensure a tangible basket of benefits for graded establishments, which 80% of establishments have signed on for. The fourth is to continually enhance the credibility of the Lilizela Tourism Awards. The Tourism Act of 2014 greatly enhanced the mandate of TGCSA, and additional funding will be needed, a plan for which must be presented to the NDT. TGCSA will possibly move into the tourist attraction and tour operating spheres in the next few years. The key stakeholders of TGCSA are the NDT, tourists, assessors, tourism establishments and trade and industry. It is still unclear how the subsidization of grading fees that the Minister mentioned on 10 March in his announcement of the tourism incentive program will be implemented. TGCSA has been engaging with NDT on this in order to encourage small to medium size establishments to get graded. The NDT will include this in their presentation next week on how the tourism incentive program will be implemented. The Lilizela Tourism Awards, now in its third year, will be changed to incorporate opinions about its length and the number of awards. TGCSA will work towards making this ceremony a respected celebration of service excellence and sustainable development in SA tourism.

Collaboration with governmental entities
Ms Stembiso Dlamini, COO of SAT, said it is important to address the needs of all stakeholders, especially provincial governments and provincial tourism agencies. There are now structures in place that enable SAT to communicate with the relevant stakeholders. An example of this is the marketing working group, in which CEOs of provincial governments and tourism agencies are informed about marketing and other strategies of SAT. Issues around SA tourism such as safety and security, transport, ease of access, skills development and others will be addressed by these types of structures. Different and various issues can be discussed in these forums, and problems can be appropriately escalated. SAT’s implementation capability will be increased by initiatives around leadership development and the retention of staff amid private sector interest. Additionally, the brand ambassador program will encourage awareness of how employees of SA tourism conduct themselves in the sector.

Mr Mntambo highlighted the challenges SAT will face in the future, the first of which is the unavailability of some vital tourism statistics. The Minister has written letters to relevant departments about the need for more of these statistics to assist with planning. The new visa regulations inhibits the tourism industry. There is a benchmarking study currently in process to indicate what SAT would do with more funds, and what it can do better in the future. SAT needs to focus on domestic tourism and the Africa strategy in the future. The airlift strategy also needs to be improved, as it compromises the competition of SA tourism in markets like China and India, as SAA has decided to cut its flights to Beijing.

Ms P Adams (ANC) said that the presentation document was inconsistent with the electronic version which included some additional slides. The mission statement of SAT makes reference to domestic marketing strategies informed by research, but is SAT working with municipalities? Although there has been an increase in the budget for efforts related to domestic tourism, is this increase enough when compared to total spending on global tourism efforts? In South Africa, previously disadvantaged peoples do not tend to travel domestically, and it is not clear how SAT is working to engage with this issue. No data has been made clear about the efficacy of the Sho't Left campaign. Oceanic tourism is becoming more popular, can SAT take advantage of this in previously disadvantaged backgrounds? The SAT has not elaborated on the Madiba inspired tourist attractions mentioned in the SAT document handed out.

Mr J Esterhuizen (IFP) asked whether there is data about the returns from offices in Africa such as the Nigerian offices. Sports events were not mentioned, and, with more than R38 million raised at a Top Gear event in Durban, SAT’s strategy on these events is not clear. Is there any kind of price regulation done by the TGCSA? SAT is one of the only departments that contributed more than R100 billion to the SA economy, and its relatively modest budget should be expanded based on its success.

Ms Makhubele-Mashele (ANC) asked about SAT’s involvement with schools and the Department of Basic Education. What are the critical issues regarding the Lilizela Awards that will be addressed? What is the time frame for approval from the Treasury for movements of currency to avoid currency losses, and will it be needed every time funds need to be moved? Tourism Marketing South Africa (TOMSA) levies are voluntary at the moment, and if they are made statutory, what will the significance be for SAT establishments?

Mr J Vos (DA) said that the Committee could have benefited from receiving the National Department of Tourism’s (NDT) strategy discussion before the SAT strategic plan. The Committee needs to understand NDT’s goals and the roles of each arm of the NDT. The Committee SHould discuss with the NDT what the objectives and strategy of SAT should be, instead of the other way around. The mandate of SAT is primarily marketing, and the NDT is focused on product development, so it makes sense to first unpack the department’s plan before discussing the plan for SAT.

The targets set by SAT in the domestic tourism sector are low compared to the additional funding they have received for the development of this sector. 3.9 million domestic trips were recorded in 2011-12, while the targets going forward are 2.8 million for 2015-16, 3 million for 2016-17 and 3.2 million for 2017-18. This indicates that funding of domestic tourism will have a limited impact and that SAT does not have confidence in the domestic marketing process. Limited geographic spread and affordability of domestic tourism are obstacles to domestic tourism. There needs to be more synergy between SAT and local government, as their spectrums of responsibility overlap in the interest of tourism. This needs to be addressed by the NDT and SAT.

Many tourism bureaus across the country are struggling due to recruitment and skills development issues. Tourism bureaus perform a wide variety of functions and should be developed to stimulate new economic growth, instead of abandoned. SAT can play a vital role in this development.

Funds could be saved by using the infrastructure of the offices of the Department of International Affairs all over the world to house SAT initiatives. What are the types of services that TGCSA is considering in its expansion of its spectrum of influence? How will this work with the National Tourism Excellence Strategy? The SAT office in Japan has started to offer comprehensive tourism packages, what kind of packages like this are being put together for the domestic market? How does the SANCB work with big cities in South Africa to align their strategy for attracting business events?

Ms E Masehela (ANC) asked for more clarity on the hybrid sales model of the SANCB. Will grading incentives change the targets for TGCSA in the next five years? Is there any regulation that governs private domestic tourism entities? The SANCB is doing exceptional work for SA tourism, but what strategies are in place to make business visitors interested in leisure tourism in South Africa?

Mr A Whitfield (DA) spoke about the confusing discrepancies between the document handed out and the slides presented, with many numerical contradictions between the two. Is the Madiba inspired tourist attraction package being incorporated in the domestic marketing strategy? It is a positive package that could lead to infrastructure improvements, such as in the Transkei. However, it is unclear whose responsibility it is to maintain the state of institutions like the Qunu Museum. SAT must work with local governments to ensure the quality of these tourist products. What monitoring mechanisms are in place to evaluate the return on the investment in the Sho't Left campaign? What does SANCB do to increase geographical spread and a fairer share of business events revenue across South Africa? The targets of SAT are not aligned with NDP policies, although the NDT Minister has signed off on those targets, which does not make sense.

Ms Ngcobo (ANC) said that the airlift problem facing South African tourism is serious, and the Department of Transport should be consulted on possibly reviving its 2006 airlift strategy. Projections of domestic tourism numbers should not be decreasing since 2012, and SAT needs to address this problem. Studies could be done in other African countries, like Kenya, that have successfully empowered their domestic tourism markets. The targeting of tourist arrivals is questionable, and SAT should rather focus on the financial contribution of tourists. What would SAT like to see amended from the 2014 Tourism Act?

SAT responses
Mr Mntambo apologized for the confusion about the presentation and the incorrect slides. Domestic tourism is new territory for SAT in many ways, and it is acknowledged that SAT has dropped the ball in its previous discontinuation of Sho't Left. Much of SAT’s work needs to be focused on domestic tourism in the future, and in the future success will be monitored and more tangible results will be made available. An important part of the job of the new Chief Marketing Officer (CMO) will be to begin more measuring and reporting on the domestic tourism sector. There is a marketing working group, chaired by Thulani Nzima (CEO of SAT), which involves SAT, NDT, CEOs of tourism authorities in provinces and CEOs of a number of metros, and this forum is finding its feet. The municipalities that are outside of the catchment of the marketing working group can ask for help from their metro or province, as SAT does not have the capacity to help everyone.

SAT is open to learning from other countries that have successfully strengthened their domestic tourism sectors, but real change will have to come from municipalities in places like the Eastern Cape implementing the solutions discussed by the marketing working group. SAT has spoken to SAA and the Department of Tourism, but the implementation of different entities’ individual strategies often leads to different overall strategies. Experts from the UN World Travel Organization have told SAT that countries that succeed in growing tourism are countries that have all parts of their government work together to achieve a common goal. Various parts of government are not successfully working together in tourism efforts.

SAT works closely with Tourism Marketing South Africa (TOMSA), from whom it gets R104 million per annum. TOMSA members are encouraged to voluntarily contribute to SAT, and SAT is in constant engagement about the benefits that this relationship offers to TOMSA members. It should be agreed that at the next Committee meeting that SAT attends, more focus should be paid to domestic tourism. Opening new SAT offices around the world has become less of a priority because of the expense, and the new hub strategy is evidence of this. Embassies around the world and SAT share marketing collateral, but embassies are not sufficiently focused on encouraging tourism to have enough infrastructure to discount the need for global SAT offices.

Mr Dirk van Schalkwyk, Chief Operating Officer and SAT board member, said operating within the South African Constitution means that tourism is a concurrent function. Local tourism as a function is assigned to provincial governments, and there should be a link with this process and SAT. The upcoming Local Government Tourism Conference (30-31 March) would be used to strengthen this relationship. SAT, the NDT and provinces are working on a process to develop a five-year strategic plan for ministers and MECs, and these kinds of issues can be addressed by this plan. This can also assist with encouraging the working of different government entities to a shared goal in terms of tourism.

There are no figure-driven targets for tourism in the NDP, although there is a target in the Medium Term Strategic Framework, which is R125 billion in revenue contributed by the tourism sector by 2017. However, the target that SAT is working towards is R144.3 billion by 2020. SAT has a good relationship with the Department of International Relations and Cooperation (DIRCO), which has led to shared facilities between SAT and some embassies, although not all foreign governments are accepting of these policies. SAT has increased its collateral revenue by R3.7 million, which shows the exploring of other avenues. SAT shares a common goal of encouraging tourism with DIRCO, as mandated by the Ambassadors Performance Agreement and business plan. SAT is engaging with the NDT to make relevant information directly available online for embassies, to strengthen this relationship.

SAT’s budget for domestic tourism was R25 million to R35 million in the past, and the budget has increased only after correspondence with Treasury. The fruits of the R100 million investments coming into effect in April in domestic tourism marketing campaigns will only be experienced in the outer years. SAT is working with NDT and the Department of Sports and Arts and Culture on a strategy for driving these initiatives.

Graham Wood said that TGCSA would never be involved in regulating prices in the SA tourism sector, as it is a free market and must operate as such. The types of services that TGCSA will be moving into are related to key heritage sites, and it will be moving cautiously to avoid disrupting a generally well-run tourism sector. The targets of graded establishments will change with both the subsidies and rebates offered to graded establishments, as well as the further incorporation of the basket of benefits. Governments at all levels could increase their use and endorsement of graded establishment as well in order to make grading more attractive. Nothing has been formally discussed with the Minister about the Lilizela Awards, although there have been internal discussions about the issue.

Mr Mntambo said SAT has not considered properly what they would like to change about the Tourism Act of 2014 due to its recent busy period.

Ms Bashni Muthaya said that all targets for SAT, including those for the domestic tourism sector, are generated using extremely recent data. Tourism is a volatile sector and is greatly affected by other factors, which means that projections more than two years into the future are relatively unreliable. The approach that has been tabled with the NDT and the Minister is that each year SAT will make market evaluations and present a new set of targets in order to best reflect the current market state. The target of 2.8 million domestic trips is based on the decreasing domestic trips in 2012/13. SAT also experiences difficulties with gathering data on domestic tourism, for which it has used the National Household Survey since 2007. This survey monitors a broad spectrum of 1300 South Africans every month. The percentage of surveyed South Africans that are taking a monthly trip is very low, at around 10%, and 75% of these trips are for visiting friends and relatives. This means that SAT’s surveys effectively gather data from a fairly small number of tourists to make meaningful analyses. SAT has been working with NDT and Statistics South Africa (StatsSA) to develop a more successful survey, and if all goes well SAT will discontinue the current survey and StatsSA will take over after 2016-2017. Information from previous surveys will soon be made available to the Committee. Between 2012 and 2013, the awareness of the domestic tourism campaign increased. With additional funding kicking in in the new fiscal year, SAT is looking at designing a specific study to look at brand awareness in the domestic tourism sector.

A comparative study was done with domestic tourism in Brazil, and the results of this study will be made available to the Committee.

SAT has changed to 'tourist arrival' from 'foreign international arrivals'. This change is due to an initiative started around 2007 by the then-Department of Environmental Affairs and Tourism, SARS, the Tourism Business Council of South Africa, StatsSA, the Reserve Bank and other entities to improve tourism statistic collection. The changes from this initiative are now following through into statistic collection, and misleading tourist statistics like 'overnight' and 'day-trip tourists' are no longer collected. The measuring of other tourism statistics like total spend, length of stay and provinces visited is done through interviews at OR Tambo International Airport and Cape Town International Airport, as well as eleven land borders to SA. More than 50 000 interviews are done by SAT every year, and the data from these interviews is extrapolated to make forecasts about total revenue and other data.

Amanda Kotze-Nhlapo said SANCB is gathering information that indicates that 43% of visiting international business delegates stay longer than their conference for leisure visits.

The geographic spread issue is addressed during the bidding process, as SANCB offers different packages in different provinces, from which the client chooses. SANCB also helps the client to market their program, as well as offering information about leisure tourism to visiting business delegates. In provinces without convention bureaus, SANCB performs the job of a provincial convention bureau. An example of the success of this is the Mahindra group meeting of more than 800 CEOs from around the world in the Eastern Cape, as well as small visits to Cape Town and Sun City.

Big cities and provinces are happy to simply cooperate with SANCB, but smaller municipalities need more hands-on assistance from SANCB. Examples such as Stellenbosch, Grahamstown and Nelspruit are on the agenda for SANCB. A representational body that employs its own staff runs the hybrid sales model to fulfill the sole target of bringing leads to SANCB, and they are only paid if they successfully find leads. The SANCB’s relationship with big cities is through five convention bureaus in Cape Town, Western Cape, Durban, Johannesburg and Tshwane. Other provinces have business event units, which work with SANCB. This collaboration leads to three spheres of government supporting bids simultaneously without excess costs to government.

Mr Bouwer said that SAT does need to liaise regularly with Treasury in order to conduct its funds to avoid currency losses. However, Departments are not allowed to access more than 45% of their budget in the first five months of the fiscal year and this represents an obstacle in moving funds around to avoid currency losses.

Ms Mahlaba said that SAT offices on the African continent only started in January of 2014, and so the return on investment (ROI) of these offices is not clear yet. The SAT brand is tracked in these countries, and after three years a more complete evaluation of the efficacy of these offices can be done.

SAT has a product department that conducts road shows in different parts of the country to educate municipalities about what tourists from different markets need. This empowers the municipalities to realize where their focus should be on the promotion of tourism in their areas, from big cities to smaller areas. There is also a product newsletter that is sent out to entities that choose to be on the SAT database, which assists and shares information on how to market and package their tourism products. There are also insider talks at Indaba each year, which are targeted at provincial and municipal entities that are interested in SAT’s work.

The mission for global offices is to train locally recruited staff to be proficient in marketing SA tourism. The SA Specialist is an online tool that teaches people how to market the product in different parts of the world. Embassies are not the best choice of offices for entities like SAT because they need to be accessible, and embassies often have strict security measures. The prospective Madiba app has not been launched yet, and will be used to encourage people to visit important locations in Madiba’s life, such as the capture site or other sites of influential moments in his life. The app will work with many streams of social media to give people more history about Madiba as they visit locations that had significance in his life. This will encourage people to share their experiences on social media, and the word-of-mouth effect can bring people to these sites from South Africa and from around the world. There are also loyalty prizes and digital stamps at the different locations that will encourage people to use the app. This app will also be used to collate information about the different Madiba-inspired locations, which SAT can use to improve the tourist’s experience. The Ghandi app will be used in a similar way, with history about significant locations in his life made available on the app. The app also offers more information about different locations regarding to his life.

Ms Dlamini said that there needs to be a further meeting with the Committee about the SAT’s shortcomings in terms of domestic tourism.

Mr Whitfield said that at the next meeting, there should be a more comprehensive presentation about SAT’s Madiba app strategy, as well as its place in the context of current domestic tourism strategy. The Madiba legacy has not been utilized enough in previous domestic tourism strategies, and this is a step in the right direction.

Mr Vos said that there needs to be a close working relationship between departments that are responsible for the maintenance and development of Madiba-related tourism infrastructure. The Qunu Museum, for example, is in a poor state and is a disgrace to the legacy of Madiba. SAT needs to identify the different domestic tourism markets, such as adventure tourism, leisure tourism and heritage tourism in order to stimulate growth in the domestic tourism markets. This will allow for more detailed strategies to be made in the future. SA has great infrastructure and should be a leading destination for conferences in the world, which hold a lot of potential for the growth of tourism in SA.

Ms Adams said that indigenous leaders from South Africa’s past could also be used in a similar way to the Madiba and Gandhi apps.

Ms Ngcobo thanked SAT for the presentation. The correct presentation document should be given to the Committee as soon as possible.

Committee Business
The Committee adopted the minutes of the previous meeting.

Ms Ngcobo said she had had an informal meeting with Home Affairs, and said that this meeting lead to the decision that the Director General of Home Affairs should visit the Committee to discuss the visa regulation issue. Six members from this Committee (Vos, Esterhuizen, Adams, Bekwa, Ngcobo and Xego-Sovita) will attend the Local Government Tourism Conference. The allocation of Cape Town Jazz Festival tickets for the Committee increased from 4 to 10.

The meeting was adjourned.


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