Tourism Business Council of South Africa; Tourism Enterprise Project; SATOUR: briefing

Meeting report

ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE MEETING
18 March 2003
TOURISM BUSINESS COUNCIL OF SOUTH AFRICA; TOURISM ENTERPRISE PROJECT; SATOUR: BRIEFING

Chairperson: Ms G Mahlangu

Documents handed out:
Tourism Business Council of South Africa Powerpoint Presentation
SATOUR Indaba 2003 Powerpoint Presentation
Ebony Consulting International on the Tourism Enterprise Programme with regard to SMME's

SUMMARY
The Committee was briefed by the Tourism Business Council of South Africa on empowerment and transformation within the tourism industry. Issues included historicially disadvantaged persons empowerment, perceptions of tourist crime levels, tour buses breaking down and accommodation costs. Ebony Consulting International on The Tourism Enterprise Programme outlined the Tourism Enterprise Programme which involved a 4-year programme of providing financial assistance , business linking and development mentoring to SMME's. SATOUR presented SATOUR 2002 statistics reflecting on the relationship between increase in tourism to jobs and GDP growth.

MINUTES
Tourism Business Council of South Africa Briefing
The Tourism Business Council South Africa (TBCSA) was represented by Dr Tanya Abrahamse, Dr Danisa Baloyi and Dr Keith Shongwe. Dr Abrahamse presented on empowerment and transformation within the tourism industry. She stated that TBCSA was the peak industry body, a voluntary body, surviving on subscriptions and mandated to work on macro economic issues affecting the tourism industry. She summarized their achievements, detailed their annual review and the TBCSA charter and discussed their initiatives with regard to empowerment and transformation.

Please refer to attached presentation

Dr K. Shongwe added that HIV/AIDS was a further factor that could dissuade international visitors from visiting South Africa as well as be a factor affecting labour within the tourism industry. Similarly other deterrents may be malaria areas and Cholera infected areas.

Dr Shongwe sits on the board of RETOSA - the SADC regional tourism body that is responsible for allowing easier flow of tourism between SADC countries.

Discussion
Mr Moorcroft (DP) asked if the increased crime perception in South Africa was a deterrent to tourism and was this not in fact reality as opposed to perception. What pressure was the TBCSA bringing to bear on the relevant departments such as Safety and Security to deal with this issue?

Dr Abrahamse answered that they had pressurised the Minister of Safety and Security to provide crime statistics, which had now been done. These indicated that crimes on tourists were relatively low but the issue was managing the perception of tourist crime. TBCSA had taken advice from countries such as America and Spain with regard to managing these perceptions in tourist crime hotspots. Bad perceptions were also created by South Africans living abroad.

Dr Baloyi added that a common strategy with partners had impacted positively, particularly with the private sector but there was still progress to be made.

Mr Arendse (ANC) stated he objected to Mr Moorcroft's statement that the perception of tourism crime was in fact a reality and advised this statement did not reflect the committee's view and regarded some committee members as already in 'pre election gear.'

Mr Singh of SATOUR added that in SATOUR's view the perception of tourist crime and the reality did not meet and SA's tourist crime was no more than at any other tourism hotspots. The perception did not fit the problem.

Mr Le Roux (NP) asked if major interference in the industry by way of empowerment was not counter productive?

Ms Baloyi answered that interventions were not interference and said that the status quo was not sustainable and not presenting a true image of South Africa. Mr Shongwe added that there were several models to achieve this such as getting bigger businesses to be supplied by smaller businesses. Everyone had a part to play.

Ms Ramotsamai (ANC) emphatically stated that TBCSA referred to a 9% of GDP that was generated by tourism, yet historically disadvantaged people do not share significantly in this percentage. A vigorous strategy was required and the status quo did not seem to be changing.

Ms Baloyi replied she understood the frustration at the slow pace of black economic empowerment but at its inception there had been only one black manager in hotel management in the whole of South Africa, nor any outsourcing programmes or linkage programmes. Things were improving.

Ms Mbuyazi (IFP) asked what mechanisms with regard to tourism and training were available to make starting a business by historically disadvantaged people possible?

Mr Moss ( ANC) made reference to Theta tourism course and stated that he had received complaints of candidates not progressing in their attempts to enter the tourism market.

Ms Abrahamse said that she would refer the query to the CEO of the Theta but had advised that Theta had been in turmoil for the last year.

Ms Chalmers (ANC) inquired about reports of tour buses regularly breaking down as well as
accommodation price escalation. What oversight TBCSA had over these two issues.

Ms Baloyi advised prices had escalated and were in fact out of reach of most South Africans. There should not be too many barriers allowed in a fledgling industry.

Ms Abrahamse advised the grading council had a customer feedback mechanism as a part of quality assurance but stated a call centre was required.

Mr Singh of SATOUR added that the exchange rate improvement may have had an effect on prices and new entrants were having difficulties accessing new markets.

Ms Ndzanga (ANC) commented that many consultants in the industry utilised a high percentage of funding accessed by start up businesses in assisting in formulating business plans. Was there any way of eradicating this?

Ms Baloyi stated that it was a problem that the Black Business Council was trying to deal with.

Ms Abrahamse said TBCSA had a guide to accessing finance put together with the Department of Environmental Affairs and Tourism (DEAT).

Mr Arendse (ANC) asked why there were still two grading systems? He also asked if the racial colour composition of the TBCSA board was representative of who participates and benefits in Tourism.

Ms Abrahamse clarified that there was only one grading system as the national grading system mandated by the Minister of Department of Environmental Affairs and Tourism. The SABS crystal grading system was a commercial venture on the part of the SABS and was now agreed to be phased out shortly.

Ms Baloyi said the board's composition was a far cry from what it was when it was all white.

Ms Abrahamse emphasised that as a body the TBCSA would prefer non-regulation and no legislation.

Prof Mbadi (UDM) asked if it is possible to measure black economic empowerment in tourism?

Ms Abrahamse replied the setting of targets was too simplistic for a complex sector and a target of 60% was very broad. There were lots of areas to measure black economic empowerment such as of black share ownership equity and consortium ownership. An example was the China engagement where government had declared only empowered companies could take part in proffering services

The chairperson expressed her frustration at the lack of general adequate transformation in the industry and opened for comments from members of the public attending the committee meeting..

Mr Pumzile Makosana advised he was a proprietor of a township tourism service on the point of closing down as he was getting no assistance in securing market share away from the traditional market owners. He said that government initiatives were not being felt at ground level and the industry required regulation. SATOUR Indaba had not worked. Specific data was needed and not generalisations as well as an effective link from the government to the people on the ground.

Several other members of the public who were township tour operators, caterers and shebeen route owners confirmed they were not able to secure business as big business had already secured it often in pre arranged packages. They also requested intervention and regulation.

The chairperson commented that they should be included in study groups and they were assured they would receive support from the committee.

Ms Abrahamse added that a black database was being developed in the provinces as well.

Ebony Consulting International on The Tourism Enterprise Programme (TEP) For SMME's
Ms M Viljoen briefly outlined the TEP, which involved a 4-year programme of providing financial assistance , business linking and development mentoring to SMME's. She emphasised how they had found that development and mentoring was far more extensively required than was initially anticipated.

Please refer to attached presentation.

Discussion
Ms Mbuyazi asked if linking buyer and seller meant acting as a middleman?

Ms Viljoen replied that it meant introducing buyers and sellers with similar expectations and capacities.

Mr Arendse asked if TEP aimed at volume of SMME's assisted or quality and assisted in additional services such as research.

Ms Viljoen replied that quality was sought and funding was made available for the correct researchers, as an example, to conduct research for the SMMEs. Market awareness workshops were also held.

Briefing by SATOUR
Mr Singh on behalf of SATOUR presented on SATOUR 2002 figures and commented on the upcoming SATOUR Indaba. SATOUR was beginning to question the exact relationship between increase in arrivals to jobs, GDP growth and it was possible there was a time lag between the two.

Please refer to attached presentation.

Discussion
Mr Arendse asked if the aggressive marketing of SA as a tourism destination in USA was the same in UK and Germany as well as Africa, and what was the impact of NEPAD in this strategy.

Mr Singh replied the marketing strategy was as aggressive in UK, USA and Germany. The Africa channel strategy had been refreshed and they were currently looking at the travel patterns in Africa to establish how best to market SA. Diversity of risk was also a factor in looking at a variety of markets. Nevertheless the SADC countries were the bedrock of SA tourism - its 'bread and butter'.

Ms Ramotsamai asked if there were SA tourism offices in West and East Africa and from Indaba what follow up was there on SMME's.

This question was echoed by Ms Mbuyazi particularly with regard to business linkages
The Zimbabwean SATOUR office had been closed because of restructuring, as it was not about a reprioritisation of markets but rather about how marketing budget was best spent. Exact details of offices in East and West Africa were not available but were part of the marketing strategy.

Mr Singh replied that from last year a follow up process had begun with SMMEs post indaba and found that there was not enough business opportunites or developing of new markets. They were continuing to study this to see what mechanism were assisting with business linkages and found that it was the social aspects of the Indaba that were most effective. SATOUR now also had pre indaba workshops with SMME three to four months before to share findings.

The chairperson concluded that empowerment and transformation issues had been discussed several times yet despite more opportunities the disadvantaged remained poor and what ought members citizens and the Department be doing? The committee required public comment as to what was required in the form of legislation, regulation or policy.

Mr Singh acknowledged the need for skills development workshops and said barriers were often at procurement decision-making levels. More qualitative data was needed on tourism.

Dr Abrahamse said she would ensure the message of the minister's displeasure was filtered down to the TBCSA body members. It was incorrect to assume SA's SMME's had no residual skills and there were in fact residual skills in SA.

Dr Baloyi added that no one wanted to take responsibility for SMME's and questioned how long the eight tourists creating one job ratio was sustainable.

Dr Shongwe agreed big business still had to change.

Ms Viljoen added that even mentoring and developing of SMME's was a step forward.

The meeting was adjourned.