South African Tourism on its 2016 Annual Performance Plan, with Deputy Minister

Meeting report

Deputy Minister on Tourism Ms Tokozile Xasa honoured the meeting with her presence. An apology was received from Minister of Tourism Mr Derek Hanekom for not being able to attend the meeting.

Opening Remarks by Deputy Minister of Tourism Ms Tokozile Xasa
Deputy Minister Xasa said the briefing would speak to what was being done to boost tourism. Tourism had growth potential. There was a concerted effort by government to grow the sector. The idea was to develop and promote Small Medium and Micro Enterprises (SMMEs) as well as emerging tourism businesses. The recent Tourism Indaba had been a success and SMMEs were also in attendance. SA on tourism marketing played on a global platform which meant that benchmarking had to be done and was done. Tourism tried to create jobs in SA and efforts were also aligned with the National Development Plan. SA was marketed collectively. R110m had been ring-fenced for domestic tourism and strategies were in place to address issues of geographic spread, seasonality, and affordability. The reality was unfortunately that it was expensive for domestic tourists to travel around SA. There was however a huge array of options on tourism i.e. township tourism, heritage tourism and cultural tourism.

Opening Remarks by Chairperson of the South African Tourism Board
The Chairperson of the South African Tourism Board, Dr Tanya Abrahamse, stated that she was newly appointed. One of the biggest changes at SA Tourism over the last year was the ministerial review. The panel that the Minister of Tourism had appointed had thoroughly looked at the work of SA Tourism. The briefing was about a benchmark on what, where and how much needed to be done. SA Tourism had a new board and a new direction. The global landscape had changed and SA Tourism had to contend with shrinking budgets. Partnerships with the tourism industry were what were needed. Some of SA Tourism’s goals were still to increase the amount of international visitors, increase domestic trips and to address issues of geographic spread. The issue was about how to get better bang for your buck. It also meant relooking at the structure of SA Tourism. The review of SA Tourism had identified the need to look at intelligence gathering differently. Consequently, new methods and new sources were used. Information technology allowed SA Tourism to look at better ways on how to invest its money. SA Tourism also had to relook at branding. The realisation was made that partnerships with the industry, provinces and local government were needed. There needed to be a team SA. SA Tourism had a new direction and in subsequent years the new thinking on the tourism growth strategy would be seen. 

South African Tourism on its Strategic Plan, Annual Performance Plan and Budget
The delegation comprised of aforementioned Dr Tanya Abrahamse; Ms Amanda Kotze-Nhlapo, Acting Chief Executive Officer and Chief Convention Bureau Officer; Mr Tom Bouwer; Chief Financial Officer; Ms Margie Whitehouse, Chief Marketing Officer; and Mr Thekiso Rakolojane Tourism Grading Council of SA: Marketing and Communications Manager. Ms Kotze-Nhlapo conducted the briefing and was duly assisted by the rest of the delegation.

The vision, mission, values and organisational culture of SA Tourism were touched on. Members were also provided with insight into the legislative framework and governance of SA Tourism. An overview of facts and figures was provided on global and South African tourism performance for 2015. Information on inroads made on domestic tourism was also provided. Background to tourism grading was also presented. The rest of the briefing spoke to the strategic plan, annual performance plan and budget of SA Tourism. Minister Hanekom had in 2015 initiated a panel review of SA Tourism’s vision, mission, strategy and plan, and its performance against its mandate. SA Tourism drafted its Strategic Plan and Annual Performance Plan in line with National Treasury’s framework. On SA Tourism’s Strategic Plan its Strategic Outcome Oriented Goal was to market SA for increased contribution of the tourism sector to inclusive and sustainable growth. Some of its strategic objectives were to contribute to the South African economy by increasing the number of travellers to and within SA, to build positive awareness of the South African experience and to improve visitor experience in line with the brand promise. SA Tourism elaborated upon its seven strategies.

Strategy One – Invest in selected markets for leisure tourism to deliver volume of travellers and value in terms of tourism value. Key performance indicators used were the number of international tourist arrivals, total revenue, percentage of brand positivity and number of domestic holiday trips. For example, on international tourism marketing SA Tourism adopted a hub approach to cluster markets into regional hubs. It also shifted from bricks and mortar offices to virtual offices and appointed marketing agency representatives to service markets with high set up costs.

Strategy Two – Work with trade partners to leverage resources to deliver travellers to and within SA. The key performance indicators were the same as those mentioned above in Strategy One. Some of the trade partners worked with was the Tourism Business Council of SA (TBCSA) and Tourism Marketing SA (TOMSA) contributors. Through this partnership the South African brand would be built and trade partners would be enabled to sell SA by creating awareness and positivity for SA as a tourism destination and conducting trade mapping in each market.

Strategy Three – Position SA amongst the top ten long-haul business events destinations by 2025 whilst collaborating to convert business travellers to leisure tourists. Key performance indicators were the number of business events hosted in SA and the number of business delegates hosted in SA. On business events the idea was to collaboratively convince key decision-makers that SA could be trusted to deliver memorable experiences and successful business events. This would amongst other efforts require the reconfiguring of the South African National Convention Bureau to generate more quality association leads that could be converted into bids, whilst focusing on African opportunities.

Strategy Four – Revamp the value proposition of tourism grading to inspire partners and stakeholders to deliver on the brand promise and quality visitor experience. Key performance indicators identified were the number of graded establishments and the number of graded rooms. On quality assurance, currently accommodation and conference facilities were being graded. SA Tourism was engaged with a review of policies relating to grading. A committee had already been established to undertake the process. SA Tourism was also enhancing and improving the integrity of the grading criteria and process. A review of grading criteria in collaboration with Grant Thornton was conducted in 2015/16 for a further three years.

Strategy Five – Collaborate with partners and stakeholders for tourism growth. Key performance indicators were stakeholder satisfaction score and stakeholder engagement matrix. On stakeholder engagement SA Tourism would strengthen its stakeholder engagement to innovatively align strategies for tourism growth with the recommendations of the Ministerial Review, commissioned by the Minister of Tourism. SA Tourism would also continue to collaborate with the provincial and city tourism agencies on initiatives to improve the seasonality and geographical spread of travel, drive domestic tourism.

Strategy Six – Create a culture of excellence and innovation to improve effectiveness and operational efficiency. Key performance indicators identified were staff satisfaction score, percentage of staff turnover and an unqualified audit. On operational efficiency SA Tourism would review and redesign its operational structure to support the revised 5-year strategy and create an inspired leadership to steer the organisation towards its goals. SA Tourism’s management and Board would continue to create an environment conducive to high performance and excellence.

Strategy Seven – Position SA Tourism as the foremost authority in tourism and business events, underpinned by quality assurance. A key performance indicator was the reviewed leisure tourism market portfolio. SA Tourism intended to rebrand, expand and resource its strategic research function to market intelligence, insights and analytics. Market intelligence and insights would be taken into account in strategic planning and decision making.
 
The briefing continued with SA Tourism’s Annual Performance Plan SA Tourism had introduced some new key performance indicators compared to previous years. These included the number of graded rooms achieved, staff satisfaction score achieved and staff turnover rate achieved. The 2016/17 targets set for the aforementioned key performance indicators were 122 686, 3.70 and 7% respectively. On the number of graded establishments achieved the 2016/17 target was 5 650. Members were provided with a quarterly breakdown of 2016/17 figures.
The Committee was also provided with detail on the budget of SA Tourism. For 2016/17 the budget sat at R1.22bn. A breakdown of the budget as per objective was also provided.

At the time of finalising its Strategic Plan, SA Tourism had embarked on a risk assessment to identify risks that might have a negative impact on the achievement of its strategic objectives. The risks identified were currency loss and increased costs of doing business abroad, possible decline in tourism industry performance and lastly the lack of assurance over tourism statistical data.  

Discussion
Mr W Faber (DA, Northern Cape) asked whether SA was really as safe as SA Tourism was alleging. He noted that Minister Derek Hanekom and Mr Quest had quarrelled over the issue at the recent Tourism Indaba. He had done research on how safe SA really was and said that 49 murders were committed daily in SA. This was five times the world average. A year ago the US Embassy had made a statement to say that SA was a dangerous place. Negative publicity affected SA’s economy as well as tourism. He felt SA not to be a safe place. The perception abroad was also that SA was not safe. Tourists knew that SA was not safe. The fact was that SA was not as safe as it was believed to be. The Department of Trade and Industry needed to relook at the markets where SA did business. Countries like Poland and Japan had deflation over the last few years yet SA’s focus was not there. Poland had asked why SA Tourism was not investing in Poland. Why was SA Tourism also not focusing on Japan? SA Tourism focused on countries like Germany and the UK which already knew about SA. SA Tourism should look at other markets other than the traditional ones.

Dr Abrahamse responded that research did show that many places were unsafe. It depended on how one dealt with the safety issue, and was about how one managed the issue of safety. SA Tourism was not under the illusion that SA was safe.

Ms Whitehouse said that SA Tourism was aware that safety and security was the number one deterrent to visitors. It was also a deterrent to domestic visitors. There was a need to make SA a safer place. Subtle ways needed to be found. She noted that Mr Richard Quest had tweeted that SA was a safe place and the tweet had gone out to 2.5m people. The matter of making SA safer needed collaboration and a positive way to do it. She said that on safety Johannesburg was the same as New York. It was all about perceptions. Relatively speaking SA was less dangerous than the rest of the world. On an investment strategy, insight and analytics was important. SA Tourism did have an office in Japan. Arrivals from Asia and the Middle East were increasing.

Mr M Khawula (IFP, Kwa-Zulu Natal) asked how SA Tourism quantified the figures on domestic tourism. It must be difficult since people used different modes of transport and did not always stay in hotels. He also asked how often establishments were graded. SA Tourism was asked whether it was involved in environmental issues like environmental health. How did SA Tourism decide in which countries it would have offices in? He further asked how SA Tourism collaborated with provinces and cities as they did their own tourism marketing. SA should have a comprehensive marketing strategy when it was marketed abroad.

Ms Whitehouse noted that collaboration with cities and provinces was a huge challenge. Cities and provinces needed to be inspired to come on board.

Mr Rakolojane responded that grading assessments were done annually. Due to the change to the traveller landscape, the Tourism Grading Council of SA also had a guest review system in place. The guest review system allowed customers to do assessments on a daily basis.

Mr B Nthebe (ANC, North West) appreciated the fact that international tourism needed to boom but it did not mean that domestic tourism should be neglected. Safety and security was created on perceptions. In France soldiers were seen inspecting dustbins but it did not mean that people stopped going to France. He believed that SA was perceived to be one of the safest countries. He asked what was being done to stimulate domestic tourism and even African intra trade.
 
Ms E Van Lingen (DA, Eastern Cape) agreed with SA Tourism’s efforts in continuing to market SA in markets like the UK and Germany where SA was already well known. Marketing was always work in progress and had to be kept at in order for markets to grow. She sympathised with SA Tourism on the currency losses that it suffered. She asked whether grading subscriptions was a growing or declining market. Grading after all came at a cost. Assessors did not work for free.

Mr Rakolojane, on whether grading subscriptions had increased or decreased, said there had been a decline but it was so with many membership based systems. The Tourism Grading Council of SA had introduced a basket of benefits. It was a value offering to the Tourism Grading Council of SA’s members. Grading fees basically covered operational costs and assessor travelling costs. There was no real profit being made. It was still being decided whether the basket of benefits was efficient or not. In the interim people were coming back into the grading system to a certain extent.

Ms Whitehouse said it was important for SA Tourism to defend core markets like Germany and the UK. Australia spent ten times more than SA on marketing. SA Tourism would send its completed research to the Committee.

Dr Abrahamse said SA Tourism had a memorandum of understanding with Tourism Marketing SA (TOMSA). SA Tourism had been neglecting the relationship of late. The Tourism Grading Council of SA offered a bundle of benefits to establishments that got graded. It was a journey to get the system of grading on the right track. 

Ms M Dikgale (ANC, Limpopo) was concerned that hotel sector growth only took place in three provinces and the Limpopo Province was not one of them. She was aware that the National Department of Tourism prioritised signage at tourist attractions. She pointed out that at Mapungubwe no accommodation was provided for students who wished to visit the site. The National Department of Tourism needed to prioritise Domestic Tourism in rural areas.  

Dr Y Vawda (EFF, Mpumalanga) asked what programme SA Tourism had in place on the training of assessors. In as much as research was important it was important to remember who was doing the research. He cautioned that researchers sometimes had preconceived ideas and could thus be subjective. Research funds had to be directed in the right direction. On the issue of safety, perceptions were varied. In SA the concern was about crime whereas in the US it was more about terrorism. International visitors to SA tend to visit the first world component of SA and not its third world component. He felt that the term visitor should be used instead of tourist. There were different types of visitors some were business visitors whilst others were leisure visitors. At the recent Tourism Indaba, the National Department of Tourism had given assurances that SA would be made safe for all tourists. SA should not only be made for tourists but also for South Africans.

Dr Abrahamse, on the biased nature of research, said that veracible unbiased information was needed. She stated that SanParks had a great deal of data. SA Tourism had a memorandum of understanding with SanParks. She understood the importance of evidence based information. Domestic Tourism was low hanging fruit which was ripe for the plucking.

Mr Faber agreed that domestic tourism was important but it only meant that money already in SA was just being shifted around. He believed that tourism income should come from abroad and then jobs could be created in SA.

Dr Abrahamse felt that domestic tourism was not only good for social cohesion but also that South Africans needed to experience tourism. It was good to spread the money.  South Africans needed to experienced what it was like to be a tourist in South Africa. 

Ms Whitehouse felt that domestic marketing efforts were important. People in SA needed to spend on travel. There was a need to change people’s perceptions in SA about travelling locally.

The Chairperson referred to page 59 of the presentation which dealt with the finances of SA Tourism and asked for an explanation on what sundry revenue comprised of as it amounted to an amount of R21m.
He said unfortunately time had run out and that any unanswered questions could be answered by SA Tourism in writing to the Committee and by the same token members could also pose additional questions to SA Tourism in writing.
 
Committee Minutes
Minutes dated the 11 May 2016 were adopted unamended.

The meeting was adjourned.