National Department of Tourism on its Quarter 3 Performance

Meeting report

Opening remarks by Director General
Mr Victor Tharage, Director-General, National Department of Tourism (NDT), explained that he had brought along his entire top management team so that the Committee could get as much detail as it required.

Ms Lulama Duma Deputy Director General: Corporate Services, a new addition to the NDT top management team was introduced to the Committee.

The NDT had a good year during 2016. Tourist arrival figures had surpassed the 10 million mark. The sector had made a good recovery. Overseas arrivals were up by 18%. Continental arrivals were also up by 11%. Continuous growth was seen. Whilst trips were not increasing the numbers of people were increasing. The idea was to get more people to do more trips. The NDT’s performance for Quarter 3 sat at 60%. Some targets were fully achieved whilst others were partially achieved. There were also other areas in the red where targets were not achieved. The NDT’s rating allowed it to zoom into matters that required attention. In terms of the budget, the Department had implemented cost containment measures when it came to staff. The NDT had to re-organise and rationalise. On Programme 2: Policy and Knowledge Services, detail would be provided on challenges encountered which had been addressed to date. There were also distinct changes to Programme 3: International Tourism Management. Circumstances had required changes to targeting. The NDT seemed to always put together its plans ambitiously but it needed to see the impact that it was making. The NDT needed to be a useful department that changed conditions on the ground.

Briefing by the National Department of Tourism (NDT) on its Quarter 3 2016/17 Performance Report
Besides Mr Tharage the delegation comprised of Ms Lulama Duma Deputy Director General: Corporate Services, Ms Shamilla Chettiar Deputy Director General: Policy and Knowledge Services, Ms Aneme Malan Deputy Director General: International Tourism Management, Ms Morongoe Ramphele Deputy Director General: Domestic Tourism Management, Ms Nomzamo Bhengu: Chief Director: Governance, Mr Ralph Ackerman Chief Financial Officer (CFO) and Ms Petra van Niekerk Parliamentary Liaison Officer. Each Deputy Director General was tasked with speaking to the performance their respective Programmes.

Programme 1: Administration
Ms Duma presented the Programme. With the Key Performance Indicator (KPI) being the number of strategic documents developed and implemented in Quarter 3 the target had been met regarding having a second draft of the Strategic Plan and Annual Performance Plan (APP) for 2017/18 submitted to the Department of Monitoring and Evaluation (DPME) and National Treasury. The vacancy rate target for the Quarter was set at 8%, actual performance at 6.8%. On black representation within the NDT the Quarterly target was set at 91.5%, actual performance sat at 95.4%. For Quarter 3 there was also 100% procurement from Broad-Based Black Economic Empowerment (B-BBEE) compliant businesses. There was also 100% compliance in the management and handling of grievances, misconduct, disputes and collective bargaining. The NDT additionally managed to meet its target on having the cabinet and cluster coordination protocol implemented. The Quarter 3 target of coming up with a Draft Tourism Amendment Bill had been met.
The Committee was also provided with service delivery information for the Quarter. During Quarter 3 there were two appeals lodged with the National Registrar of Tourist Guides as both appellants felt aggrieved by the decision of their respective Provincial Registrars. The National Registrar upheld the decisions of the Provincial Registrars. The National Tourism Information Gateways (NTIGs) were operational at both OR Tambo International Airport and King Shaka International Airport. A total of 400 tourist queries were received per month.

Programme 2: Policy and Knowledge Services
Ms Chettiar presented the Programme. On policy documents that were to be developed on the implementation of the Tourism Act, 2014 for Quarter 3, the target of having stakeholder consultations on the National Tourism Information and Monitoring System (NTIMS) draft regulations had not taken place due to a delay in the gazetting of the draft regulations for public comment. Stakeholder consultations would be prioritised in Quarter 4. The Quarterly target of having a report on the work of the Tourism B-BBEE Charter Council completed had been met. With a view of supporting tourism attractions to enhance destination competitiveness many targets had not been met for the Quarter. For example commencement of construction at the Shangoni Gate tourism development in Kruger National Park was supposed to commence for the Quarter. This target was not met due to delays in the appointment of the construction phase service providers. The NDT intended to engage SANParks to facilitate commencement of construction. On a number of priority areas incentivised to facilitate sustainable tourism growth and development the Quarterly target of having Draft Universal Access incentive guidelines developed and submitted for approval was met. The Quarterly target of having the State of Tourism Report (STR) finalised and launched had not been met however the 2015 STR new indicators data had been collected. During Quarter 3, 2016 STR data collection had commenced.

Programme 3: International Tourism Management
Ms Malan presented the Programme. On the number of skills development opportunities facilitated through bilateral cooperation, the Quarterly target of identifying and selecting cross-border guiding candidates to be trained had not been met. However a database of South African cross border tourist guides had been developed. Things were however now on track for the target to be met. There were also efforts by the NDT for the recruitment of tourist guides and frontline staff for language training in Russian and Mandarin. The Quarterly target was for Phase 2 of the Russian training to commence which entailed the immersion phase of the training programme in Russia. The NDT had taken a strategic decision to scale down on the Russian training following an opportunity that was presented to fast track Mandarin training. The implementation of Phase 2 of language training in Russian would take place in Quarter 4. The Quarterly target of recruitment and selection of learner chefs for placement overseas had not been met. However the Recruitment and Selection Committee had been established consisting of the NDT, South African Chefs Association (SACA) and the Seychelles Tourism Academy. The delayed response from the Seychelles in finalising the service level agreement resulted in the postponement of the interviews with potential candidates.

Programme 4: Domestic Tourism Management
Ms Ramphele presented the Programme. The NDT aimed to review its Domestic Tourism Growth Strategy. An audit on it was completed but was not yet presented to stakeholders. The Quarterly target was to have action plans developed based on the outcomes of the audit. The NDT only managed to have draft action plans developed as there was still consulting with stakeholders on the outcomes of the review. Consultations had continued into Quarter 4. At present the action plans had been finalised and was implemented. On enterprise development the Quarterly target was the continuation of support to 100 enterprises on mentorship, market access, business development and training. The actual achievement was that 61 enterprises were supported through business diagnostics, mentorship, coaching and market access exposure. The reason for missing the target was that there was a delay in the appointment of service providers for all nine provinces. Recruitment and support for more enterprises commenced in Quarter 4. At present service providers had been appointed in all provinces. The NDT also managed to meet its Quarterly target of launching one incubator ie Pilanesburg. On capacity building the NDT had a Quarterly target of monitoring its training of 2000 learners in its Hospitality Service Training Programme. The Quarterly target could not be achieved due to the number of youth attending training and work placements differing monthly due to absenteeism or drop outs. The North West and Limpopo Provinces had requested that training be started in Quarter 4 instead. This was agreed to by the NDT. However developments since then were that the service provider for North West and Limpopo Provinces had withdrawn from the contract. The next step was to issue another advert to replace the service provider that had withdrawn.

Mr Ackerman presented the Committee with details on the financial information of the NDT for the Quarter. As at 31 December 2016 the NDT had spent 70% of its budget. The percentage expenditure per Programme was Administration – 67%, Policy and Knowledge Services – 78%, International Tourism – 78% and Domestic Tourism – 49%.

Discussion
Mr G Krumbock (DA) referred to page 67 which spoke about capacity building programmes for the youth given the huge unemployment rate in SA. He was surprised that the number of youth varied on a monthly basis due to drop outs. How could anyone be absent from the programme or even drop out from it? The briefing did not give an idea of the extent of the drop outs and absenteeism. The NDT was asked to provide the Committee with a breakdown of figures. To what extent was the drop outs and absenteeism taking place. There needed to be more careful screening and vetting of people for programmes. People dropping out and staying way were wasting opportunities that could have been given to someone else. The numbers of complaints received by the NDT were few. How could figures be so low given the problems that the visa regulations had caused? He asked whether the NDT was conducting research on customer satisfaction levels. Were there benchmarks for international tourists? Did the NDT speak to persons who had bad experiences? He expressed huge disappointment that there was still no signage on the roads to ex-President Nelson Mandela’s capture site. This was not the first time that he was bringing up the issue. He found it very frustrating that nothing was done after all this time. There were no signs on the N3.The huge sum of R55m had been spent on the Nelson Mandela Museum and the statue of Madiba. The figure was expected to go over R100m. He asked the NDT for feedback on the issue. Nobody was aware that the Museum was situated at the location because there was no signage.

Mr Tharage did not wish to make any promises on signage for fear that he could not deliver on such promise due to other departments having a say in the matter as well. He noted that the NDT dealt with interpretative signage. The signage referred to by Mr Krumbock was signage that fell under the Department of Transport. There was a whole host of issues to consider on signage. There were safety imperatives to consider and also the types of signage for national and provincial roads that was needed. He did agree that the Nelson Mandela capture site was of great historical importance. The NDT would try to assist where it could on the matter given constraints that were there. He conceded that the NDT had perhaps not done enough to create awareness of the mechanism that was there for complaints. The good news was that the tourism industry establishments themselves had their own complaints systems in place. Many complaints were thus resolved at that level before it could be dealt with by the NDT. He noted that discussion on the customer satisfaction survey issue had taken place. Further discussions would take place.

Ms Ramphele tried to shed some light on the signage matter raised. The NDT had engaged with the Umgeni Municipality and also the relevant Provincial Department of Transport. Two applications for signage on roads had been considered, the one was on the R103 and the other was on the N3. The South African National Roads Agency Limited (SANRAL) had approved signage for the R103 but had declined signage for the N3. She did however note that once the NDT had done interpretative signage they would allocate funds for signage on the R103. The blue flag beach programme was all about a quality experience for beach-goers. Learners received training on environmental issues, water quality etc. A total of 200 learners were earmarked but only 180 had participated. The drop outs were a pity. Some of the reasons for the drop outs were the long hours, female learners falling pregnant and some learners going back to school. She agreed to provide the Committee with more detail.

Ms Chettiar said that customer satisfaction was dealt with at visitor information centres at airports. Visitors filled out survey forms.

Mr Krumbock was disappointed by the decision made by the SANRAL. The Minister of Tourism, Mr Derek Hanekom, had stated that the matter would be dealt with via an inter ministerial and inter departmental approach. How could the SANRAL not allow such signage to be put up. He spoke under correction but said that on the N3 there was even signage for a private golf course. All over SA one even saw signage on roads for casinos.

The Chairperson agreed with Mr Krumbock that one often saw signage on roads advertising private establishments. The Committee would raise the matter with Minister Hanekom when he next appeared before the Committee. There was a serious discussion needed between the ministers and SANRAL.

Ms P Adams (ANC) observed that over Quarters 1, 2 and 3 there had been a backlog. On the implementation of 200 learners on the blue flag programme at 50 beaches she asked where the programme was launched in the KwaZulu-Natal and Eastern Cape Provinces. What was the impact of training the learners? Would the training continue into the next financial year? She was also disappointed that there was absenteeism and drop outs in the youth training programmes. What was the reason for the drop outs? The NDT was asked whether it was in contact with the students that had dropped out. The NDT needed to have oversight over what the service provider was doing. She said that the incubator programme worked well in the North West Province. It was a huge success. She felt that the NDT needed to target all nine provinces, especially provinces like Limpopo and Eastern Cape should be considered. On the 100 rural enterprises that the NDT had supported, what type of support had been given to them? Where were these enterprises located? The NDT was asked whether it worked with provinces and municipalities. She pointed out that municipalities could work with communities and had Integrated Development Plans (IDPs) in place. On slide 57 which spoke about the Accreditation of Travel Companies (ATCs) the NDT had stated that it intended to roll it out to African countries as well. To which African countries would it be rolled out? During the briefing it seemed as though the NDT had encountered many delays. Did the NDT take into account when it planned that delays could happen? There needed to be continuous engagement with stakeholders. On the Information Communication Technology Strategic Plan (ICTSP) which was implemented she asked when the development of the Tourism Spatial Information Framework would take place.

Mr Tharage agreed that good work was being done in the North West Province on the incubator pilot project. He stated that even if there was one incubator in each province it still would not be enough. Going forward other mechanisms needed to be considered as well. The blue flag programme was about the quality of experience at the beach and also about safety issues. On the ATC in Africa the problem that was encountered was that when some operators were given the opportunity to facilitate they had a tendency to push up their fees. There was a need to reach out to these operators and to communicate to them that it was better to get a bigger market share than to overcharge people. He felt that the NDT would meet its ATC targets in the current financial year.

Ms Ramphele said that the NDT would have liked to have had the incubators all over SA. The private sector needed to be taken on board. She said that Small, Medium and Micro Enterprises (SMMES) were assisted on amongst others issues of mentorship, coaching and on gaining market access. The Committee would be provided with a breakdown of detail on the support to the 100 enterprises. The NDT did have focused engagement with stakeholders.

Ms Malan, on ATC’s, said that there was a preliminary indication that the NDT needed to do more work. The priorities of each country needed to be looked at. A decision would be taken on what ATCs there would be for Africa.

Mr T Rhawula (EFF) noted that as he perused the Report before the Committee he remained concerned about the grading system of accommodation establishments. The system was still skewed in favour of previously advantaged persons. Accommodation was central to the transformation of the tourism sector. There were very few black accommodation establishments that were graded. It could be linked to ownership patterns. The question that needed to be asked was what the obstacles were. It seemed to him that no effort was being put in to transform the grading of accommodation establishments. The NDT needed to have targets that spoke directly to the township and rural economy. There had to be an incremental improvement which the NDT should show to members. On the oceans economy he wished to see the NDT play a facilitative role for rural and township people to participate. The reality was that rural and township people had no idea what role they could play on the oceans economy. It was the duty of the NDT to play a facilitative role. He pointed out that in the North West Province the provincial department wished to erect a statue of President Jacob Zuma. He asked whether erecting the statue would make an impact on tourism in the North West Province. From a tourism perspective would the statue attract tourists nationally or internationally. He added that Mr Tharage had a choice on whether or not to answer the question over the President Zuma statue.

Mr Tharage opted not to answer the question about the statue of President Zuma. The NDT was tasked with promoting SA. He invited members to visit a site in the Gauteng Province where various statues were showcased. There were statues of pre-colonial times, colonial times, anti-Apartheid stalwarts as well as persons who had supported the South African cause ie Julius Nyerere and Alan Patton. There was an exhibition of the entire history of Southern Africa.

Ms Chettiar explained that the oceans economy was not only about activities at the coastline. It was also about building routes. Township and rural economies needed to be facilitated. The coastline needed to be linked to township and rural areas. The role of the NDT was facilitative. The idea was to expand the experience. Route development and product development was important.

Mr J Vos (DA) referred to the NDT’s efforts on capacity building with local government and asked what programmes the NDT had to capacitate local government officials on product development etc. He also referred to comments made by Mr Tharage that attempts were being made to introduce legislative amendments to the Tourism Grading Council of SA (TGCSA). He asked what the legislative changes were. Referring to the finances of the NDT he asked what benefits there were for SA paying membership fees to organisations like the United Nations World Tourism Organisation (UNWTO). He also asked for detail on the rentals that the NDT was paying on office accommodation and on buildings.

Mr Tharage explained that if SA did not pay its memberships, it ran the risk of losing its right to participate in multilateral and regional bodies. These bodies developed protocols and if membership fees were not paid up then participation would not be allowed. Being a member allowed SA to influence the agenda on the body of work of a particular organisation.

Ms Malan pointed out that SA as a member of the UNWTO served on its Executive Council and was part of the statistics committee.

Mr Ackerman explained that spending on office accommodation sat at R29.268m for Quarter 3.Spending to date was R22.7m.

Ms Chettiar stated that local government training was National Qualifications Framework (NQF) rated. The NDT worked with local government officials on destination development which had to be incorporated into the IDPs of municipalities. The NDT also assisted with unblocking of obstacles where needed.

The Chairperson asked what the reason was why the NDT had decided to prioritise the language training of Mandarin over Russian. What was the impact of the workshops held on the language training of Mandarin? On the increase in tourist arrivals she asked from which countries they came from. African countries should be included in the answer. Given that SA had prioritised the Chinese she asked whether China would start accepting South African Airways (SAA) flights once again. She observed that the NDT seemed to have delays on procurement and on service providers. What caused the delays? She said that if the NDT had been reconfigured the Committee should be informed about it.

Mr Tharage, on the impact of the language training, explained that there were certain markets that were sensitive and wished to feel welcome when they visited SA. China was one such market. They would be greatly appreciative if guides on Robben Island could explain things in Mandarin. Everything was being put in place for the Chinese market that was growing exponentially. SAA did have the option to have a flight to China but they did not feel it profitable for them to have a single flight. It was an issue which needed to be looked into. He confirmed that the NDT was in the midst of restructuring. The NDT had tabled a new strategy the previous year but he assured the Committee that it would be kept abreast of things. He did point out that internal processes had been completed. Two new programmes with the new structure was firstly Visitor Services and Enterprise Development and secondly Destination Development. The Committee would be provided with more detail. He noted that top management at present functioned in such a manner to allow for the smooth transition from the old to the new structure. Deputy Director Generals in the NDT were kept knowledgeable about all aspects across the various programmes of the NDT.

Ms Malan noted that the Russian language training had not been affected by the Mandarin training being moved forward. Increases in tourist arrivals from Africa came from countries like Zimbabwe and Lesotho and from overseas came from the United Kingdom, the USA and Germany.

Mr Vos pointed out that his TGCSA question remained unanswered.

The Chairperson stated that the TGCSA would be accompanying SA Tourism the following Friday when a scheduled briefing was planned to take place. She asked if it was not better to wait for the TGCSA to answer the question themselves.

Mr Tharage explained that he did not wish to answer the question on the proposed legislation in order to avoid jumping the gun. It was a policy question after all. The Minister was tasked with taking the proposal to cabinet. If the policy was approved then it would come to Parliament. He did say that the NDT had synchronised the accessibility of the grading incentive. Work was also being done to encourage more establishments to get graded. He added that the NDT noted all the suggestions made by the Committee and said that it would be considered when the NDT dealt with its Annual Performance Plan (APP).
The Chairperson had heard via the media comments about the old residence of Mr Nelson Mandela in Vilakazi Street, Soweto. She asked whether the Street was going to become a tourism precinct. Was the Gauteng Province going to be in charge? The safety initiative was a priority on the site. All spheres of government were expected to be involved.

Update on oversight visit preparations to the Free State Province 27-31 March 2017
The Committee's planned oversight visit had been approved by Parliament.

The Chairperson stated that the House Chairperson required all members who will be going on the oversight to be present for the entire duration. She asked Mr Jerry Boltina, Committee Secretary, to speak to preparations.

Mr Jerry Boltina said that he was in discussion with the Province on the itinerary for the Committee. Once it was finalised it would be communicated to members. He stated that Minister Hanekom had also invited the Committee to the Local Government Tourism Indaba to be held on the 3 and 4 April 2017 at Emperors Palace in Gauteng. He would submit an application to Parliament requesting that members be allowed to attend the Indaba.

The meeting was adjourned.