South African Tourism 3rd & 4th quarter 2014/15 & 1st Quarter 2015/16 performance; 2015 Indaba Tourism Report

Tourism

14 August 2015
Chairperson: Ms L Makhubele-Mashele (ANC)
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Meeting Summary

Mr Thulani Nzima Chief Executive Officer, South African Tourism (SAT) reported that SAT and the tourism industry had experienced some challenges. There was the belief that SA was unsafe due to the outbreak of Ebola in some parts of Africa. Xenophobic attacks on foreign nationals also did not help matters. Delays and backlogs in the processing of visas also affected tourist figures. The new visa regulations also had an impact on tourist figures. SAT experienced a huge challenge in receiving data from StatsSA. To complicate things further StatsSA also adopted a change in methodology in its data assimilation.

Due to the challenges aforementioned reporting by SAT for the 2014 financial year was not as good as what it should have been. Data for Quarters 2, 3 and 4 was only received at the end of May 2015. Fortunately SAT had the support of the Auditor-General’s Office as far as it’s auditing was concerned. SAT was considering alternative ways of obtaining data. Another challenge that SAT had to contend with was currency fluctuations. The Rand was weakening in relation to the dollar and it made things difficult as SAT had to deal in dollars abroad. SAT was normally awarded funding on a quarterly basis; however National Treasury had agreed to provide funding upfront to mitigate further currency fluctuation losses. SAT was re-evaluating how it operated abroad. There were also ring-fenced funds to promote domestic tourism. SAT was presented with the Ministerial Review Report and it had been implemented. The Report had a noticeable emphasis on stakeholder engagement.

The Committee was presented with SAT’s 2014/15 organisational performance results for Quarters 3 and 4. Key performance indicators (KPI) were highlighted along with targets set and what had been achieved. Explanations were given on reasons for deviation from targets. For example on the number of foreign visitor arrivals to SA and on the amount of tourism revenue generated the Quarters’ 3 and 4 targets could not be met due to delays on the release of tourism statistics by StatsSA.  However there were figures for the number of domestic travellers per year. For Quarters 3 and 4 the figures achieved were lower than the targets set. The explanation given was that there was still a poor culture of travel amongst South Africans notwithstanding the reasonably high consumer spending that benefited the retail sector more than the travel sector. Figures that spoke to the financial performance of SAT in Quarters 3 and 4 of 2014/15 reflected that in Quarter 3 nine of SAT’s country offices spent 90% or more of their year-to-year budgets, two county offices were slightly below budget and four country offices were slightly below budget. In Quarter 3, of SAT’s seventeen business units eleven spent 90% or more of their 2014/15 year to year budgets. Three were slightly behind on their budgets and three were significantly below budget. Actions were taken to address the under expenditure. For Quarter 4 twelve of SAT’s country offices had spent 90% or more of their year-to-year budgets. Two country offices were slightly below budget and one county office was significantly below budget. For Quarter 4, of SAT’s seventeen business units fourteen spent 90% or more of their 2014/15 year to year budgets. Three were slightly behind on their budgets.

Organisational performance results for Quarter 1 of 2015/16 reflected once again that key performance indicators (KPI) were highlighted along with targets set and what had been achieved. Explanations were given on reasons for deviation from targets. The year on year tourist arrivals excluding transit passengers had decreased by -5.6% for Quarter 1 from 2 435 341 in 2014/15 to 2 292 169 in 2015/16. SAT no longer used foreign arrivals as a KPI but chose to look at tourist arrivals.  Challenges were highlighted for Quarter 1 similar to those mentioned earlier as Ebola; visa processing capacity constraints, and negative publicity from xenophobic attacks.

The focus for domestic marketing for Quarter 1 was on building awareness and a culture of travel in SA by growing the number of holiday trips and tourism revenue through the implementation of the Domestic Business plan.

Members were in conclusion presented with the financial performance of SAT in Quarter 1 of 2015/16. Nine of SAT’s country offices spent 90% or more of their year to date budgets. Two country offices were slightly below budget and four were significantly below budget. Of SAT’s seventeen business units twelve spent 90% or more of their 2014/15 year to year budgets. One was slightly behind on their budgets and four were significantly below budget.

The Committee was concerned that SAT could not present a full picture of its performance due to a lack of data being supplied to them by StatsSA. Members felt that SAT should consider other sources of data such as tourism authorities in the provinces. What about SAT themselves compiling data? Members also pointed out that even though SAT had spent the bulk of its budgets it did not seem to achieve the outcomes that it had hoped to achieve. SAT had cited currency fluctuations as one of its major challenges. SAT was asked to quantify the losses that it had suffered as a result of it. Figures on the number of graded establishments seemed to be on the decline and to make matters worse the revenue from grading to SAT made up a measly 1% of its total revenue. Was charging for grading worth the effort? Members suggested that grading should perhaps be free. Members also suggested that perhaps the NDT could foot the bill for grading. Was the basket of benefits on offer to establishments to encourage them to be graded not good enough? SAT was asked why it had written off an amount of R50m relating to grading. Members also pointed out that there seemed to be collusion with officials on grading as some establishments who had four or five star grades did not deserve them as their quality of service was not commensurate with their high star grading. The suggestion was made that perhaps the Committee needed to make a policy decision on grading and to review it. Of concern to members was the drop in tourist arrival figures in comparing figures from 2014/15 to 2015/16. This was especially worrying since the drop had taken place before the new visa regulations were introduced. SAT was asked what it thought the impact would be for the latter part of 2015/16. Did SAT have estimates of job losses that might be seen? Members found it surprising that tourist arrival figures to SA had been negatively impacted upon by the Ebola outbreak in Africa given that not a single case of Ebola had been reported in SA. SAT was asked whether its offices abroad had informed people that there was no basis for the Ebola fear in SA. SAT had also alleged that the xenophobic attacks that had taken place in SA had also contributed to the drop in tourist arrival figures. Members asked whether SAT had done an analytical study to confirm that the Xenophobic attacks had caused a drop in tourist figures.

Members pointed out that a study commissioned by the Tourism Business Council of SA had shown that SA had lost R4.1bn in tourism revenue and had lost 9300 jobs since the introduction of the new visa regulations. It was evident to the Committee that SAT had its work cut out in promoting domestic tourism and yet plans were being made to introduce e-tolls to other provinces besides Gauteng. Members asked SAT whether a change in the domestic tourism strategy was perhaps needed. A further concern raised by Members was that provinces and municipalities branded themselves abroad first and foremost before branding SA as a country. Should branding SA not be a priority? Members noted the challenges raised by SAT and asked what other strategies SAT had in place to try to address them. 

Meeting report

South African Tourism (SAT)
South African Tourism briefed the Committee on its 2014/15 Quarter 3 and Quarter 4 Performance Reports as well as on its 2015/16 Quarter 1 Performance Report. The delegation comprised of Mr Thulani Nzima, Chief Executive Officer (CEO), Ms Stembiso Dlamini, Chief Operating Officer (COO); Mr Tom Bouwer Chief Financial Officer (CFO); Ms Amanda Kotze-Nhlapo, Chief Convention Bureau Officer; and Ms Ntokozo Langa, Manager: Office of the CEO.

Mr Nzima noted that SAT and the tourism industry had experienced some challenges. There was the belief that SA was unsafe due to the outbreak of Ebola in some parts of Africa. Xenophobic attacks on foreign nationals also did not help matters. Delays and backlogs in the processing of visas also affected tourist figures. The new visa regulations also had an impact. SAT experienced a huge challenge in receiving data from StatsSA. To complicate things further StatsSA also adopted a change in methodology in its data assimilation.
Due to the challenges aforementioned reporting by SAT for the 2014 financial year was not as good as what it should have been. Data for Quarters 2, 3 and 4 had only been received at the end of May 2015. Fortunately SAT had the support of the Auditor-General’s Office as far as it’s auditing was concerned. SAT was considering alternative ways of obtaining data. Another challenge that SAT had to contend with was currency fluctuations. The Rand was weakening in relation to the dollar and it made things difficult as SAT had to deal in dollars abroad. SAT was normally awarded funding on a quarterly basis; however National Treasury had agreed to provide funding upfront to mitigate further currency fluctuation losses. SAT was re-evaluating how it operated abroad. There were also ring-fenced funds to promote domestic tourism. SAT was presented with the Ministerial Review Report and it had been implemented. The Report had a noticeable emphasis on stakeholder engagement.
 
Ms Dlamini presented the 2014/15 organisational performance results for Quarters 3 and 4. Key performance indicators (KPI) were highlighted along with targets set and what had been achieved. Explanations were given on reasons for deviation from targets. For example on the number of foreign visitor arrivals to SA and on the amount of tourism revenue generated the Quarters 3 and 4 targets could not be met due to delays by StatsSA  releasing tourism statistics.  There were figures for the number of domestic travellers per year. For Quarters 3 and 4 the figures achieved were lower than the targets set. The explanation given was that there was still a poor culture of travel amongst South Africans notwithstanding the reasonably high consumer spending that benefited the retail sector more than the travel sector.
 
Mr Bouwer presented figures that spoke to the financial performance of SAT in Quarters 3 and 4 of 2014/15. In Quarter 3 nine of SAT’s country offices spent 90% or more of their year to year budgets, two country offices were slightly below budget and four country offices were slightly below budget. In Quarter 3, of SAT’s seventeen business units eleven spent 90% or more of their 2014/15 year to year budgets. Three were slightly behind on their budgets and three were significantly below budget. Actions had been taken to address the under expenditure. For Quarter 4 twelve of SAT’s country offices had spent 90% or more of their year-to-year budgets. Two country offices were slightly below budget and one county office was significantly below budget. For Quarter 4, of SAT’s seventeen business units fourteen spent 90% or more of their 2014/15 year to year budgets. Three were slightly behind on their budgets.

Ms Dlamini continued on the organisational performance results for Quarter 1 of 2015/16, once again key performance indicators (KPI) were highlighted along with targets set and what had been achieved. Explanations were given on reasons for deviation from targets. The year on year tourist arrivals excluding transit passengers had decreased by -5.6% for Quarter 1 from 2 435 341 in 2014/15 to 2 292 169 in 2015/16. SAT no longer used foreign arrivals as a KPI but chose to look at tourist arrivals. She highlighted challenges for Quarter 1 similar to what Mr Nzima had done on Ebola, visa processing capacity constraints and the negative publicity from Xenophobic attacks. The focus for domestic marketing for Quarter 1 was on building awareness and a culture of travel in SA by growing the number of holiday trips and tourism revenue through the implementation of the Domestic Business plan.

Mr Bouwer presented the financial performance of SAT in Quarter 1 of 2015/16. Nine of SAT’s country offices spent 90% or more of their year to date budgets. Two country offices were slightly below budget and four were significantly below budget. Of SAT’s seventeen business units twelve spent 90% or more of their 2014/15 year to year budgets. One was slightly behind on their budgets and four were significantly below budget.

Discussion
Mr G Krumbock (DA) said for the past ten years SAT had always presented good reports to the Committee. It was the first time that SAT could not present a full picture due to StatsSA not being able to provide them with statistics. The visa regulations were another reason why tourism figures were low. Were the statistics from StatsSA accurate? He understood that SAT had done its media buy upfront to mitigate the effect of currency fluctuations.  Could SAT quantify an amount that had been lost due to currency fluctuations? What percentage were the losses of SAT’s budget spend? Whether grading should be charged for was a moot point. The amount of establishments that were graded had decreased. What was the percentage of establishments that were actually graded compared to those that could possibly be graded? Figures presented showed that grading revenue only amounted to 1% of the total revenue received by SAT. The amount was so small. What was the rationale for charging grading fees? Why did the NDT could not pick up the cost of grading? If it were free to establishments then they would be more willing to come onboard. It was concerning that for Quarter 1 2015/16 there had been a decrease of -5.6% in tourist arrivals from 2014/15 to 2015/16.The figures excluded transit visitor figures. To make matters worse this decline took place before the visa regulations came into effect. He asked whether the previous financial year’s figures also excluded transit visitors.

Mr Krumbock was hugely concerned about the impact that the cancellation of flights from China would have on tourism. He appreciated that SAT had alternative sources on information besides StatsSA. He suggested that SAT use provincial tourism departments as alternative sources of information. Everyone was well aware of the impact of visa regulations. SAT was asked what it believed its impact would be on Quarter 2 and Quarter 3 figures. What was the decline in foreign arrivals that SAT expected and how would revenue be affected? He asked whether SAT had estimates of what job losses would be seen, and whether SAT could project on what the figure might be. What was SAT’s role in compiling statistics and advising the NDT? SAT was after all at the forefront of where data was. How did SAT see its role as a conduit of information that it obtained at the source?

Mr Krumbock furthermore asked whether SAT had exposure to statistics on child trafficking. A newspaper article had stated that there were 30 000 child prostitutes. Did SAT have information on what the article spoke to? If SAT in fact did have such information was it communicated to the NDT?

Mr Nzima informed the Committee that SAT would be coming back to the Committee in a few weeks time to speak to the issue of domestic tourism, more detail on domestic tourism would be provided then. The problem that SAT had with StatsSA was a perennial problem. SAT almost received a qualified audit report in 2013 from the Auditor-General’s (AG) Office due to the issue. StatsSA had in that year only provided data for nine months of the year. The AG’s Office reported as if SAT had not reached its targets. The problem continued in 2014/15. What could SAT do about it? StatsSA had internal problems. The role of StatsSA was not only to deal with travelling data it covered many other issues. The problem could be capacity related. The Minister of Tourism had written a letter to the Minister in charge of StatsSA about the data issue. The unavailability of data impacted upon the performance reporting of SAT. SAT could not set up its own research capacity, as it was too great a challenge.

The -5.6% drop in 2015/16 Quarter 1 arrival figures was based on the annual target of 10m. The target of 10m included transit figures. The target could not be changed, as it required approval from the SAT board. Going forward SAT would collect figures from StatsSA that would exclude transit passenger figures. The data issue was being addressed. SAT did have a Memorandum of Understanding (MOU) with StatsSA. The MOU would guide the relationship. StatsSA had a tendency to release figures in the public domain before they were even given to SAT. Data from StatsSA invariably contained mistakes. These issues impacted upon the reputation damage of SAT. In 2014/15 StatsSA had released data that did not have information from certain countries. The problems with StatsSA went as far back to the time of Minister Marthinus van Schalkwyk. If SAT did not have an agreement with the AG’s Office then it could have obtained a qualified audit report. The issue of grading being voluntary or involuntary was dependant on a legislative process. The charging or not charging for grading was a budget issue.

Mr Nzima agreed that the revenue from grading was small. In Quarter 2 of 2015/16 there would be challenges, some measurable whilst others not. The impact of the new visa regulations was difficult to measure at present. International travel booking patterns were done long before the actual trip. The new visa regulations covered different aspects. The transit visa could be sorted out easily. The issue of biometric data collection was difficult to deal with. Additionally there was the requirement for an unabridged birth certificate for children; its implementation had been postponed until June 2015. Travellers had cancelled bookings to SA due to uncertainty. SAT received information regularly at their offices about travellers who were turned back by airlines for supposedly not having the correct documents. The airlines made decisions on the spot to turn travellers back. It was even a problem in SA. South African Airways provided statistics to SAT. People preferred to visit destinations where there were no visa issues. SA was the only country that spoke about children under the age of eighteen. Airlines defined a child as someone under the age of twelve. A child twelve years of age was considered an adult by airlines.

Mr Nzima conceded that there would be job losses due to the drop in figures. SAT did consider alternative data sources, as there was quite a myriad of them. Some of the data was limited on universal application. Other data sources were sectoral i.e. hotels, airlines, and car rental agencies. The requirement of data was that it was supposed to provide the information needed. Some associations out there were even protective of their data.

Mr Bouwer responded that on currency losses a total of R300m had been lost over five years. 15% of funds had already been transferred to countries abroad.

Ms Dlamini stated that SAT could not make projections for Quarters 2 and 3. SAT made estimations internally but it was not communicated out. On the tracking of jobs SAT threw it back to the industry to manage it. SAT should have a dashboard to track jobs.

Mr R Cebekhulu (IFP) said the briefing had pointed out that the Ebola virus did in fact affect tourism figures. It was concerning given that not a single case of Ebola had been reported in SA. He understood Ebola only affected West Africa. Alleging that Ebola was one of the causes of a drop in tourism figures left much to be desired. When China had an outbreak of a deadly flu one did not hear that people stopped going to China. He asked why SAT only relied on StatsSA for data. There were tourism structures in provinces that had data, SAT needed to communicate with them. Information could also be accessed from game parks and other tourist attractions. On domestic tourism, in KwaZulu-Natal a park had reduced the charges for locals. He asked SAT to comment. 

Mr Nzima explained that the issue of Ebola depended upon perceptions. Americans’ perception of Africa was very bad, so if one section of Africa had a health scare they thought it could easily spread to another. Cases of Ebola had been reported in the USA and in Frankfurt, Germany, but nobody stopped travelling to those countries. Asians also reacted adversely to health scares and were averse to being inoculated outside of their country. China was the country that had cancelled the most flights to SA. China and the USA believed that SA had lied about having no cases of Ebola being reported in SA. The biggest challenge was to deal with the perceptions of people. SAT’s biggest spend was on creating a positive image of SA. Implementing price discrimination in SA was possible but difficult; he had not seen it succeed in many countries. SANParks had introduced it but required that a person purchase a SANParks card to access the benefits. SAT could not dictate to parks to introduce price discrimination. 

Ms P Adams (ANC) referring to the finances of SAT, asked for a breakdown of the 155% percentage spend. In Quarter 1 if 40% of the budget had been spent was it the norm. She referred to the challenges that SAT had highlighted regarding people coming to SA. There were apparently health concerns about coming to SA. What had SAT done at its international offices to inform people that there were no health concerns? It had been pointed out in the briefing that there were visa processing capacity constraints. What had SAT done to assist the NDT and the Department of International Relations and Cooperation (DIRCO) on the issue? Xenophobic attacks in SA had also been blamed for the lower tourist numbers. Why had SA’s attacks have so much coverage? Xenophobic attacks were also taking place in countries like the USA, France and in North Africa. Was a study done to prove that xenophobic attacks had affected figures? 

Mr Nzima speaking on xenophobic attacks said that there was a love hate relationship with the media. He did not mean to bash the media. Some things were no different from what they were in the rest of the world but when it happened in SA it received much attention. For example Xenophobic attacks took place in Europe but one hardly heard about it, and crime was also huge in the USA.  

Mr Bouwer on the issue of the 155% said he would provide the Committee with SAT’s management accounts. 40% was not the norm; the norm was upfront payments.

Ms A Matshobeni (EFF) noted that tourism depended on a great deal of enabling factors. Tourist arrival figures from Africa seem to be the highest. Was an analytic study done on whether the xenophobic attacks in SA had affected figures? A study commissioned by the Tourism Business Council of SA (TBCSA) had shown that SA had lost R4.1bn in tourism revenue since the introduction of the tourism regulations. A total of 9300 jobs had also been lost. What engagement was needed with the Department of Home Affairs to assist in not causing tourist figures to drop? What threats were there to the domestic tourism market? In 2014, South Africans undertook 12 million trips. She was concerned that plans were in place to rollout e-tolls in the rest of the provinces. The e-tolls in Gauteng Province had been the starting point.  

Mr Nzima stated that e-tolls could impact upon people’s decisions to travel. At present there was no way to calculate the effect the xenophobic attacks had on figures. Barriers to travel could be inflation, unemployment etc. When people went through difficulties travel was not a priority. He agreed that visitors to SA from regional Africa were huge. SAT had a two-pronged approach to attracting regional tourists. The first was invitations were sent out to countries. The DIRCO was called in to help. The second approach was more long term and plans were specifically made to demonstrate SA’s historic links with the rest of Africa.

Ms S Xego-Sovita (ANC) wished to confirm that SAT had engaged with National Treasury to receive upfront payments to mitigate the effects of currency exposure. She asked what the reason was for R50m being written off on grading. How could SAT be of assistance to the ordinary citizen? There were instances where establishments advertised themselves as four or five star establishments when in actual fact they were not. There was a problem somewhere. On domestic tourism the figures were decreasing. Was SAT’s strategy doing enough to sensitise South Africans or was change in strategy needed. A total of R100m had been ring-fenced to fund the strategy. She would appreciate information about the board of SAT. Why were tourist figures to the Limpopo Province the highest from all the provinces? On grading SAT was asked if the basket of benefits was good enough. It did not seem to be the case as grading figures were declining. Was the Tourism Incentive Programme (TIP) yielding results? What was the DJ Tours all about? Was it focussed in urban areas?

Mr Nzima responded that the R50m had been written off as bad debt. The reason for the bad debt accruing was due to the fact that grading had shifted from a one year to a three-year programme. Establishments were billed for grading but they simply refused to pay. The billing was done prior to grading being done. The issue was that establishments were already on the system and were billed before being graded. The reality was that establishments were being billed for a service that they had not yet received as.  Specifics on the board of the SAT were to be found in its Annual Report. SAT reported to Parliament on an annual basis via its Annual Report. The board was unpaid for many years; payment had only recently been introduced. There was also a governance policy on the performance of board members.  On making domestic tourism affordable the Sho’t Left Campaign had been introduced. SAT was very specific with its partners like low cost airlines, hotels, tour operators and school sporting bodies when it came to domestic tourism. The DJ Tours did not only focus on urban areas. SAT looked at centres of excellence. The focus was on first timers. The morning and afternoon slots of DJ’s were to be used. The DJ Mr John Robbie had agreed to come on board and so did the music group Mikasa. 

Mr Bouwer confirmed that the TIP was an NDT initiative that subsidised the grading of establishments. The buying power of SAT had decreased due to currency fluctuations. Upfront payments by National Treasury were not easily attained. It was necessary due to the weakening Rand. National Treasury had been asked to do three things. The first was to work out a budget in foreign currency, the second was for a budget rate to be used and thirdly to pay the funds upfront. SAT had to apply each year to have the funds paid up front. The currency gain for SAT in making upfront payments was R34m. A review panel was in place to work on forward hedging.

Mr Nzima said that the NDT had only recently launched the TIP.  82% of the R50m went towards Small, Medium and Micro Enterprises (SMMEs). The TIP targeted SMMEs. The TIP also assisted with the retro fitment of establishments with energy efficient equipment and assisted small businesses to access markets where they could showcase their products.

Ms Dlamini said that Limpopo was the most visited province in 2014. Friends and family were mostly visited. The Province hosted two Lekgotlas per year i.e. one at Easter and one in September. There was also the Oppikoppi Festival in Limpopo Province.  The private sector did not see domestic tourism as being profitable. SAT was trying to convince private sector that it was.

Ms Adams asked whether the R100m for domestic tourism was ring-fenced, there were at times challenges faced with ring-fenced funds. What challenges and successes had the SAT had on the use of the R100m. Was the basket of benefits working?

Mr Nzima said for the financial year 2015/16 the R100m ring-fenced funds were kicking in. The impact was not yet felt. On domestic tourism there were two focus areas. The first was to create a culture of travel in SA. The second was conversion. 70% of the R100m was used for development and the remaining 30% was converted to travel. Currently SAT’s board, the Minister and the NDT had given approval.

Mr Bouwer, speaking to the ring-fenced funds for domestic tourism, said that for the first year the amount was R100m. for the second year it was R105m and for the third year there was an amount of R110m that was part of the SAT’s baseline.

The Acting Chairperson noted that SAT seemed to have spent 93% or was it 97% of its budget. However the outcomes point to the fact that SAT had not achieved what it had desired. SAT was not yielding positive results. SAT had in the briefing cited hindrances. What other strategies did the SAT have in place? She observed that school sports in provinces could be a revenue generator. On brand awareness provinces in SA marketed themselves first before marketing SA; they did not brand SA. Municipalities did the same thing. Some provinces did not host business events. Were provinces benefiting from the successes of SAT’s Convention Bureau? What was SAT’s strategy to assist provinces? She agreed that there were establishments that had high star grading but when you actually visited them they were far from top notch. Inputs from visitors were captured on TripAdvisor. There seem to be some sort of collusion with officials who did the grading. What strategies did SAT have to encourage establishments to get graded? It was perhaps time for the Committee to make a policy decision on grading as a whole and to review it. In July 2015 the Minister of Home Affairs had opened up a visa facilitation office/centre abroad. He had stated that the tourism industry had bashed the immigration regulations and had not worked with the DHA. She asked what SAT had done to reach a position of common ground with the DHA. What issues had SAT seen in the tourism industry that could assist the DHA? 

Mr Nzima responded that SAT did have strategies to have a working relationship with the DHA. SAT had never criticised the DHA on the visa regulations; visa regulations were the prerogative of the DHA. The prevention of child trafficking was very important. The porous borders of SA were a concern. The problem was in the implementation of the visa regulations.  The first issue was the state of readiness of the DHA. The collection of biometric data was another problem. The second issue was about communication. There were various versions on the implementation and compliance of the visa regulations. Consul-generals themselves were confused. The SAT had deliberately stayed away from media publicity on the new visa regulations. SAT had never criticised the DHA. SAT, the provinces and cities had formed a working group that would not make critical statements about the visa regulations. SAT had regular meetings with the DHA. Child trafficking was a problem. A problem was that some countries did not have unabridged birth certificates. Another challenge was whether everyone could do biometric data collection. Were there alternatives to consider? On grading a policy decision could be made as to whether grading should be charged for or not. As long as grading was voluntary it would be difficult to achieve the targets set. The basket of goods was an expensive exercise. Grading was done based on the investment made on the establishment to provide a certain quality of service. The difficulty for establishments was to maintain that level of quality. Establishments when graded expected customer numbers to increase. Government should set an example and use graded establishments. Revenue obtained through grading was minute in comparison to the headache that grading was causing SAT. He felt it was best to change the strategy on grading. Unfortunately grading could not be funded for now. It was currently on the back burner. On branding, SAT, the provinces and cities had formed a forum of which he was the chairperson. The principles of the forum were to define roles and activities. There was no duplication or dilution of the brand and activities. Brand SA and SAT marketed SA overseas. Provinces were not allowed to purchase advertising space on the Cable News Network (CNN) which as on the international arena. Locally provinces could use local messages. Guidelines were in place. There was an understanding of different roles and activities. He confirmed that domestic spend was 97%. Greater detail on domestic tourism would be provided to the Committee when SAT returned to do it’s briefing on domestic tourism in a few weeks’ time.

Ms Kotze-Nhlapo emphasised that it was important for everyone in SA to work together. The business events strategy was for SA. Provincial tourism authorities and their business units had limited funds. Municipalities also had limited funds for tourism. The National Convention Bureau (NCB) got together with provinces and municipalities and met four times a year to agree on budgets and to assist one another. Issues discussed included media, leads etc. A three-year programme was embarked upon; the first phase was complete. The average delegate spent 9 days in SA for an event. Of the 177 delegates for Meetings Africa, 66% had not been to SA. If a province did not have a convention bureau then the NCB would help them establish one or would act as a conventions bureau for that province.
 
Ms Dlamini, on the problem of high star graded establishments not being up to scratch, explained that the current model of assessors used by the Tourism Grading Council of SA was not full time employees. Part-time persons were contracted using service provider agreements. Each province had a Provincial Master Assessor that checked on assessors. Spot checks were done on establishments to check that star grading were correct. Going forward SAT had partnered with TripAdvisor. On SAT’s relationship with its partners, SAT was putting together a stakeholder engagement strategy.

The meeting was adjourned.
 

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