South African Tourism on its 2015 Strategic Plan and Annual Performance Plan

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Meeting Summary

South African (SA) Tourism briefed the Committee on its Strategic Plan and Annual Performance Plan noting that the presentation was quite abridged, but later offering to send through more details to the Committee. Its three main areas of focus were leisure tourism business, the National Convention Bureau and the Tourism Grading Council of SA. Regional and Domestic Tourism were considered important. The vision, mission and mandate, and also the strategic plans and objectives were outlined. Some of these included contributing to the growth of tourist arrivals in SA, to the growth of domestic tourism in SA and to maintain brand awareness of SA as a tourist destination. SA Tourism would provide quality assurance for tourism products and increase the number of business events in the country. The Committee was also provided with a breakdown of figures on the Annual Performance Targets for 2015/16 and beyond, although these would change as a result of a change in the methodology used by StatsSA. Members were given an overview of 2015/16 Budget figures as well as Medium Term Expenditure Framework (MTEF) Estimates. The total budget for SA Tourism for 2015/16 was R1.17bn. For 2016/17 and 2017/18 it was R1.22bn and R1.28bn respectively. For the 2015/16 budget the government’s grant to SA Tourism made up 83% of the income, with the remainder coming from levies, grading fees, and contributions from Indaba and Meetings Africa. Tourism SA was particularly affected by currency fluctuations and it was decided to make upfront payment to foreign currency budgets to manage the risk of currency exposure. It also requested a budget rate from National Treasury and had a budget in foreign countries.

Some of the National Convention Bureau’s focus areas were corporate meetings, incentive meetings, international conventions and exhibitions. Members were provided with an overview of the leisure tourism market portfolio for SA Tourism, from within and outside Africa. A hub strategy was followed, with regional hubs set up to increase market penetration. In the past three years, regional Africa was prioritised and was given a ring-fenced budget. SA Tourism had already opened up an office in Nigeria. An office was to be opened in Angola in mid 2015 and one was planned for Kenya at the end of 2015/16. Domestic Tourism was also a high priority and additional budget had been allocated and been ring-fenced. 70% of the domestic tourism budget was to go towards economic development and awareness and the remaining 30% was for conversion. SA Tourism was in the process of building a campaign to inspire and create awareness of the benefits of domestic travel.

The Committee was briefly given insight into the vision, mission, strategic objectives and goals of the Tourism Grading Council of SA (TGCSA).Some of the areas where grading took place included accommodation, restaurants and tourist attractions. The importance of the value chain in tourism was stressed.

Members expressed concern over the high entry fees that were being charged at South African heritage sites like Robben Island and Table Mountain, saying that these prevented an increase in domestic traveller numbers. The controversial issue of the visa regulations was again raised, with Members asking if the Minister of Tourism had discussed the matter with the Minister of Home Affairs, since they believed that these regulations could negatively impact on tourism. Another viewpoint was that the regulations were needed, to ensure the security of SA and to prevent child trafficking, and it was necessary to consider a good balance. Members agreed that getting biometrics on entry was important. The Chairperson suggested that this not be debated in the current meeting, since SA Tourism was not involved in the issue, and must also be distinguished from the National Department of Tourism. Members asked whether a greater emphasis on domestic tourism was to be pursued at the expense of foreign tourism, but SA Tourism stressed that this would not happen, and a good balance would be found, although the domestic market was one that could be more stable.

The Committee also adopted outstanding minutes from 13 and 20 May.

Meeting report

Chairperson's Opening Remarks

The Chairperson informed the Committee that he had, as agreed at the last meeting, drafted the letter in connection with the Member who was not participating in meetings.

He also wished to thank Ms Petra van Niekerk, Parliamentary Liaison Officer: Office of the Director General, for the good work and support that she was giving to the Committee.

South African Tourism Strategic and Annual Performance Plan briefing

South African (SA) Tourism briefed the Committee on its Strategic Plan and Annual Performance Plan. The delegation comprised of Mr Thulani Nzima Chief Executive Officer, Ms Stembiso Dlamini Chief Operating Officer, Mr Tom Bouwer Chief Financial Officer, Ms Amanda Kotze-Nhlapo Chief Convention Bureau Officer, Mr Thekiso Rakolojane Acting Chief Quality Assurance Officer and Ms Ntokoza Langa Office Manager: CEO.

Mr Thulani Nzima, Chief Executive Officer, SA Tourism, said that his presentation would be somewhat abridged. He noted that SA Tourism had three areas of focus - namely, the leisure tourism business, the National Convention Bureau and the Tourism Grading Council of SA. He would try to provide a broad overview of what SA Tourism did. Regional and Domestic Tourism was regarded as important.

Mr Nzima touched on the vision, mission and mandate of SA Tourism (see attached presentation). The Strategic Objectives, as contained in the Strategic Plan of SA Tourism, were outlined. Some of the strategic objectives were to contribute to the growth of tourist arrivals in SA, to contribute to the growth of domestic tourism in SA, to maintain brand awareness of SA as a tourist destination, to provide quality assurance for tourism products, and to increase the number of business events in SA. The Committee was also provided with a breakdown of figures on the Annual Performance Targets 2015/16 and beyond. The Committee was alerted to the fact that baseline and target figures would be changed due to a change in the methodology used by StatsSA.

Members were given an overview of 2015/16 Budget figures as well as Medium Term Expenditure Framework (MTEF) Estimates. The total budget for SA Tourism for 2015/16 was R1.17bn. For 2016/17 and 2017/18 it was R1.22bn and R1.28bn respectively. For the 2015/16 Budget, the government grant allocations to SA Tourism made up 83% of the income, whilst the remainder comprised of Tourism and Marketing Levy income of 9%; Indaba and Meetings Africa contributed 4%; Grading fees accounted for 2% and Sundry revenue for the remaining 2%. He emphasised that SA Tourism was greatly affected by currency fluctuations and decided to make upfront payment to foreign currency budgets to manage the risk of currency exposure. It also requested a budget rate from National Treasury and had a budget in foreign countries.

The National Convention Bureau’s focus areas were corporate meetings, incentive meetings, international conventions and exhibitions. Members were provided with an overview of the leisure tourism market portfolio for SA Tourism. For example core markets in Africa were Angola and Mozambique, whereas investment markets in Europe were Italy and Russia. SA Tourism followed a hub strategy, where it set up regional hubs to increase market penetration.  In the past three years regional Africa was prioritised and was given a ring-fenced budget. SA Tourism had already opened up an office in Nigeria. An office was to be opened in Angola in mid 2015 and one was planned for Kenya at the end of 2015/16.

Domestic Tourism was also a high priority and additional budget had been allocated and been ring-fenced. 70% of the domestic tourism budget was to go towards economic development and awareness and the remaining 30% was for conversion. SA Tourism was in the process of building a campaign to inspire and create awareness of the benefits of domestic travel. The Committee was briefly given insight into the vision, mission, strategic objectives and goals of the Tourism Grading Council of SA (TGCSA).Some of the areas where grading took place included accommodation, restaurants and tourist attractions. The importance of the value chain in tourism was stressed. Everybody had a role to play.

Discussion

Mr W Faber (DA, Northern Cape) pointed out that it cost a family of four R920 to visit Robben Island. This, he said, was way too expensive. It was after all one of SA’s heritage sites. The same could be said about visiting Table Mountain - people were simply not able to afford the visits.

Mr Faber pointed out that in 2014, the goal had been to have 15 million domestic travellers but only 12 million could be achieved. He agreed that biometrics on arrivals was important. He noted that in a media statement the Director General of the Department of Home Affairs had stated that there would be no changes made to the visa regulations, and he enquired whether this was correct. He noted that the Minister of Tourism, Mr Derek Hanekom, had stated that he would sort out the matter of the visa regulations with the Minister of Home Affairs, Mr Malusi Gigaba, and wondered if the two Ministers had met to sort the matter out. He pointed out that the people of SA and tourism were suffering. Any feedback would be appreciated.

Mr Nzima, on the issue of fees charged at heritage sites, stated that the Minister of Tourism was looking at the matter, as it was a serious concern. SA Tourism itself could not influence the fees that were charged at heritage sites, since these did not fall within its mandate, but it could continue to lobby on the issue. Minister Hanekom had said that it was a travesty of justice that South Africans could not experience their own heritage sites. He noted that Mandela-inspired tourist attractions included Freedom Park. He said that members could download the application on their phones.

Other matters being looked at were the impact of xenophobia and Ebola on tourism. 

Mr Nzima agreed that the targets set in the National Tourism Sector Strategy (NTSS) were onerous. The targets were realistic when the economy was doing well but now that things were looking not so good the NTSS targets had to change. The changes in the NTSS would be to revise targets, set targets that SA Tourism could impact upon and that the targets set should be realistic. On the issue of the visa regulations he was not sure how far discussions between the two Ministers were. He did know that Minister Hanekom was concerned about the visa regulations. He could not speculate on what the situation was.

Mr J Londt (DA, Western Cape) welcomed the increased focus on domestic tourism, but wanted to know what the expected increase was in domestic tourism set off against the loss of international travellers. The National Department of Tourism (NDT) had to fight for tourism and SA as a whole. The economy would suffer and jobs would be lost if it did not, and also eventually SA Tourism would see a drop in figures, and it would be asked what SA Tourism and the NDT did to prevent this.

The Chairperson wished to clarify that SA Tourism was not the NDT. The Committee had engaged with the NDT. In the presentation reference was made to the Tourism Bill, and in the third term the Committee would do an analysis of the Bill.  

Mr B Nthebe (ANC, North West) noted that in the Committee’s last engagement with SA Tourism he had been passionate about the increased focus on domestic tourism but after the presentation he was not so passionate. He said that he had served on the North West Province’s Tourism Board. It was felt that there were not enough platforms for ordinary people in the street. For example Sun City was well known internationally but there were communities living in surrounding areas not even aware of it. He agreed that the costs of visiting Robben Island were way too much, and asked how the prices were calculated? He continued with the issue of intra African Tourism Trade. On the 29 April 2015 there had been a Southern African Development Community (SADC) meeting where the importance of industrialisation was stressed. It was a known fact that tourism was important for industrialisation. Regional integration in Africa was also important. SA needed to "up the ante". For years the emphasis had been on international tourism. There was a need to look closely at regional and domestic tourism. He explained that the visa regulations were to ensure the security of SA. One only had to look at the USA in terms of how important security was. The visa regulations also attempted to put a stop to child trafficking. If the visa regulations affected business, then the matter could be discussed. One had to consider why there was a need for the regulations. A balance needed to be struck between the security interests of SA and those of tourism. People were creating fears that were not substantiated. Discussions over the issue were needed in the future.

Mr Nzima said that he did not challenge the rationale behind the regulations, but those lay within the competency of the Department of Home Affairs. The rationale behind the visa regulations was understood, but the issue was more to do with implementation. It was indeed necessary to collect biometrics. Protection against child trafficking was also needed. He remarked again that although his presentation did not set out that much detail, more could be provided to the Committee. He felt that Sun City and provincial authorities needed to work on the issue of educating surrounding communities. SA Tourism used Meetings Africa and other forums as platforms to discuss intra-African Travel. People did move around for trade, but the need was to get more people to move around for tourism. SA Tourism’s hub strategy spoke to how intra-African Tourism was approached.

The Chairperson asked that Members should not debate the visa regulations issue.

Mr Londt pointed out that there were facts and figures which showed that the visa regulations had negative consequences for tourism, jobs and the economy.

Mr Nzima explained that there was no question of trying to increase domestic tourism figures at the expense of international tourism. Domestic tourism was important. When the global environment changed as it did, domestic tourism was what would keep SA Tourism going. Successful tourism countries worldwide relied greatly on domestic tourism.

The Chairperson said that SA Tourism should be aware that there were two sides of the discourse to the visa regulations issue. He asked SA Tourism not try to speak on behalf of the NDT over the issue. The NDT’s position would come from Minister Hanekom. Members would discuss the matter further amongst themselves.

Mr Nzima said that SA Tourism did not wish to debate the issue of the visa regulations.

Ms M Dikgale (ANC, Limpopo) quipped that she wished to raise a point of order against Mr Nthebe, Mr Faber and Mr Londt as they had hijacked her time to question SA Tourism. She was glad that the Limpopo Province was also a target for SA Tourism’s work. There were many mining areas where people were suffering. She asked what SA Tourism’s plans in industries and sectors were.

Ms Amanda Kotze-Nhlapo, Chief Convention Bureau Office, SA Tourism, said that SA Tourism had looked at provinces and identified their strengths. There was a need for coordination between the provinces and SA Tourism. SA Tourism aligned sectors with government sectors. Everyone agreed on the sectors to be focussed on. The ultimate aim was to grow the economy.

The Chairperson noted that the mission of SA Tourism was to align with strategies from provinces. He noted that the Committee represented provinces, and had provincial interests at heart. If one tourist created seven jobs and the figure for tourist arrivals in 2013 was 9.6 million, then he said that numerous jobs could be created from those arrivals. He referred to slide 14 and asked if it was correct that for 2015/16, SA Tourism’s government contribution was R977 million, and asked if that money was coming through the NDT alone, or via other departments as well. He referred to slide 47 and agreed that tourism’s value chain was important, as there were many stakeholders. The Committee dealt with the Departments of Transport, Trade and Industry as well as with Small Business Development. When the Committee looked at SA Tourism there was so much potential for it to do good things for SA. The point being made was that the Committee would like to partner with SA Tourism on its work. SA Tourism should feel free to ask the Committee to engage departments on its behalf if the need should arise.

Ms Kotze-Nhlapo on aligning SA Tourism strategies with strategies from provinces, she noted that a SA Business Events Strategy was in place.

Mr Nzima responded that the value chain slide spoke about the impact of tourism on other spheres of the economy. Sometimes SA Tourism did not articulate enough on its budgets. Members had to bear in mind that the work of SA Tourism was international, regional and domestic. SA Tourism’s quest for funding would be so much easier if Members, in person, could see the work that it did. SA Tourism did not receive any funding from any other department besides the NDT. The NDT was SA Tourism’s lifeline. The NDT had assisted SA Tourism with its case for additional funding. This additional funding was needed to market SA regionally and domestically. The NDT also had an incentive programme which would augment the figure for jobs created. Arrival figures differed from country to country. He agreed that in 2013 there were 9.6m arrivals. Tourism’s direct and indirect jobs came to 1.5 million in number, but he suggested that it was best to hold back on the multiplier effect. This figure excluded the domestic contribution.

The Chairperson asked Members to forward ideas to the Committee on possible places where the Committee could undertake oversight visits.

Committee Minutes

Committee Minutes dated 13 May 2015 were adopted, with some minor amendments.
Minutes dated 20 May were adopted with no amendments.

The meeting was adjourned.

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