SA Tourism briefed the Committee on its Annual Performance Plan (APP) for 2018/19.
SA Tourism had a goal of having 5m arrivals/trips within 5 years ie 2017-2021. The figure of 5m was broken down into 4m international and 1m domestic tourists. For 2017 which was year one of the 5-in-5 strategy, SA Tourism had achieved its target for domestic holiday trips but had missed its target for international tourist arrivals. From a global perspective for 2017 there had been growth in most regions with the exception of Asia and the Indian Ocean Islands. From a provincial perspective in 2017 most provinces saw growth in international tourist arrivals with the exception of Gauteng and the North West Provinces. Total domestic trips declined by 29% in 2017 whilst domestic holiday trips increased by 12% in the same period. In 2017, all provinces received fewer domestic trips with the exception of Mpumalanga Province. Despite the significant decrease, Limpopo Province still remained the largest beneficiary of domestic tourism. A positive was that there had been growth in the number of business events and the number of international delegates hosted between 2014 and 2017. On grading there had been a decrease in the number of graded establishments with the largest drop being in the Western Cape followed by the Gauteng and KwaZulu-Natal Provinces. SA Tourism’s Annual Performance Plan 2018/19 was presented to the Committee. Detail was provided on targets set for 2018/19 across its five Programmes ie Corporate Support, Business Enablement, Leisure Tourism Marketing, Business Events and lastly Tourist Experience. On SA Tourism’s financials the budget for 2018/19 was around R1.4bn. 78% of SA Tourism’s budget was used for core business whilst the remaining 22% covered its overheads.
SA Tourism was asked whether it had done an analysis on domestic tourism given that domestic tourism figures were not good. Members were concerned that the constant fuel hikes in SA affected the cost of things including the cost of travelling. Members asked whether the gains and losses of having fuel hikes had been measured. Countries like Germany had double digit growth. What was SA doing to encourage growth? Members did understand the impact that external threats like the Ebola virus and the water crisis in the Western Cape had on tourist numbers. Members observed that countries which were affected by crises would often reduce the cost of flights into and out of them to offset the negative impact on tourism of the crises. What efforts were being made in SA to have airlines reduce the cost of flights into SA? The idea after all was to get people into SA. Members pointed out that youngsters who had studied tourism found it difficult to find jobs in the sector. What was SA Tourism doing to absorb these youngsters into the sector? Members stated that all over SA there were hidden gems that locals needed to showcase to tourists. Members were concerned about unemployment in SA being far too high. SA Tourism was asked how it brought new entrants as tour operators and as Destination Marketing Companies (DMCs) into the sector. Members felt that DMCs needed to package the stories of locals for tourists to experience. SA Tourism was asked what it was doing to assist persons to become DMCs. Members pointed out that township tourism held huge opportunities. SA Tourism needed to assist locals to enter the tourism space. Township tourism should be promoted as it could contribute to the broader growth of the economy. Did SA Tourism have a way of bringing young people from rural areas into the tourism sector? Members felt that political stability was needed in SA in order for tourism to flourish. The concern was that ongoing violent protests scared tourists off. On safety and security SA Tourism and the NDT was encouraged to work more closely with the South African Police Services (SAPS). A system had to be put in place around crimes involving tourists. In most cases perpetrators would get off free because the tourist had already returned home by the time that the arrest was made. Members suggested the use of video conferencing so that overseas based tourists could identify the perpetrators that had robbed them Members felt that perhaps some provincial tourism authorities were not doing enough to showcase hidden gems within their provinces. SA Tourism was urged to push provincial authorities on tourism. Members observed that many of SA’s embassies did not market SA as a tourist destination as they should. Embassies needed to put in more effort. Members raised concerns about the time that it took for the Department of Transport to process licence renewals of operators. Some operators waited up to two years for their licences to be renewed. SA Tourism was asked to engage the Department of Transport over the matter. Operators were consequently forced to operate without a licence and were fined. Operators would pass on the cost of the fine to the tourist. Members asked whether SA could really become competitive on prices. Could macroeconomics be tampered with? Members emphasised the need for the tourism sector to be transformed. SA’s economy needed to be more inclusive. SA Tourism was asked whether establishments refused to be graded due to the cost involved. Members asked whether SA Tourism had considered the impact of online visa applications. Given that 2018 was the centenary birthday celebrations of Mr Nelson Mandela SA Tourism was asked what programme it had in place to attract tourists to SA. The Chairperson asked how the Committee could engage with provincial authorities and if it did would it be beneficial to tourism development. Was SA Tourism pleased with the Foreign Service Bill the way it was given that SA Tourism had offices abroad? SA Tourism was urged when it looked at amendments to the Tourism Act that it should bear in mind that the legislative function of the Committee was limited. The Committee had a number of pieces of legislation to deal with and had a limited schedule for 2019. Members asked whether SA Tourism had considered the KwaZulu-Natal Province’s request that the Tourism Indaba be permanently held in KwaZulu-Natal. SA Tourism and the NDT were asked to keep members informed about upcoming tourism events in provinces.
Briefing by SA Tourism on its Annual Performance Plan (APP) 2018/19
Mr Sisa Ntshona, Chief Executive Officer (CEO), SA Tourism, said that the briefing would have two segments. The first would touch on the performance of SA Tourism for 2017 and the second would speak to the Annual Performance Plan 2018/19. SA Tourism had a goal of having 5m arrivals/trips within 5 years ie 2017-2021. The figure of 5m was broken down into 4m international and 1m domestic tourists. The 5-in-5 goal was jointly owned by SA Tourism and provincial tourism authorities. For 2017, which was year one of the 5-in-5 strategy, SA Tourism had achieved its target for domestic holiday trips but had missed its target for international tourist arrivals. From a global perspective for 2017 there had been growth in most regions with the exception of Asia and the Indian Ocean Islands. Arrivals from China were decreasing because of visa processing issues. The Chinese also had concerns around safety and security in SA. Another barrier identified was that it cost too much to get to SA. Good news was that British Airways was to have direct flights from Heathrow Airport to King Shaka International Airport. Alitalia also had a direct flight from Rome to OR Tambo International Airport. SA Tourism was doing its utmost to remove barriers. From a provincial perspective in 2017 most provinces saw growth in international tourist arrivals with the exception of Gauteng and the North West Provinces. Total domestic trips declined by 29% in 2017 whilst domestic holiday trips increased by 12% in the same period. In 2017, all provinces received fewer domestic trips with the exception of Mpumalanga Province. Despite the significant decrease, Limpopo Province still remained the largest beneficiary of domestic tourism. Matters were made worse by the fact that SA Express Airlines had been suspended from taking to the skies. This contributed to the dip in numbers. There were therefore no flights to the Northern Cape. A positive was that there had been growth in the number of business events and the number of international delegates hosted between 2014 and 2017. On grading there had been a decrease in the number of graded establishments but graded rooms increased since 2015. The largest drop in graded establishments was in the Western Cape followed by the Gauteng and KwaZulu-Natal Provinces. SA Tourism seemed to be doing well on transformation within the organisation itself even though it did not have a dedicated transformation department. Transformation needed to however be part of SA Tourism’s business. The Annual Performance Plan 2018/19 was presented to the Committee. Detail was provided on targets set for 2018/19 across the five Programmes of SA Tourism:
Programme 1: Corporate Support
The target was set at 7% for 2018/19 on the percentage vacancy rate maintained. The plan was also to have compliance with the Employment Equity Act and to achieve an unqualified audit report for 2018/19. SA Tourism had managed to have clean audits for the past 15 years.
Programme 2: Business Enablement
For 2018/19 SA Tourism planned to have a stakeholder satisfaction score of 4.1. SA Tourism relied a great deal on trade and needed to remain visible and relevant.
Programme 3: Leisure Tourism Marketing
On the number of international tourist arrivals the target for 2018/19 was set at 11.2m. On the number of total domestic trips the target was set at 25.4m. The planned targets for percentage geographic spread for international tourist arrivals and for domestic tourists were set at 19% and 12% respectively.
Programme 4: Business Events
The 2018/19 target for Small Medium Enterprises (SME) attendance at SA Tourism platforms was set at 182. On SME participation for all SA Tourism hosting activities the planned target was set at 25.
Programme 5: Tourist Experience
The planned target on the number of business events hosted in SA was set at 153. The plan was also
to host a total of 86 006 international delegates for 2018/19. For 2018/19 the target was also to have R67m in revenue from Tourism Indaba and Meetings Africa.
On SA Tourism’s financials the budget for 2018/19 was around R1.4bn. 78% of SA Tourism’s budget was used for core business whilst the remaining 22% covered its overheads.
The Chairperson welcomed the efforts of SA Tourism.
Mr J Londt (DA, Western Cape) asked whether SA Tourism had done an analysis on domestic tourism given that domestic tourism figures were not good. He felt that the constant fuel hikes in SA did affect the cost of things including the cost of travelling. Did SA Tourism check what the gains and losses were in having the fuel price hikes? He noted that Germany had double digit growth. What was SA doing to encourage growth? He understood the impact that external threats like the Ebola virus and the water crisis in the Western Cape had on tourist numbers. He stated that when overseas countries had crises they immediately reduced the prices of flights into and out of their countries. Two examples given were Turkey and Israel. He asked why efforts were not made to do the same with airlines in SA. The idea should be to get people into SA. He noted that he had spoken with youngsters that had studied tourism but had found it difficult to find jobs in the sector. What was SA Tourism doing to absorb these types of youngsters into the sector? In the Southern Cape where he was from he pointed out that there were many hidden gems as there were in other parts of SA. South Africans needed to highlight and share their hidden gems with tourists. The best experiences were often found off the beaten path away from the big cities.
Ms Sthembiso Dlamini, Chief Operations Officer, SA Tourism, on promoting local gems, pointed out that the City of Cape had started an initiative whereby the City had consolidated various experiences in Cape Town into one package. The question was how to replicate this model in other provinces as well. It was a good concept. The issue was about how to bring local members of the community on board. SA Tourism as a destination marketing organisation could create a platform to market a particular destination. On international marketing and the growth that Germany had shown she said that for SA the German tourist market was its bread and butter. Popular for Germans were safaris and beaches. SA Tourism focused on first time tourists. New experiences were being introduced. One of the efforts by SA Tourism was to increase airlift capacity. Airlift had a huge role to play. SA Tourism had also realised the importance of a partnership with trade. Many Germans went online to source information but people still went the traditional route of a travel agent. SA Tourism had partnered with major tour operating companies in Germany. She reiterated that for first time tourists, Cape Town, the Kruger National Park and safari was the selling point. SA Tourism partnered with trade to a large extent. SA Tourism invited trade to SA and hosted them. A different SA was shown to them. Offerings were diversified and provinces like the Eastern Cape and the Northern Cape were showcased. In this way trade was better informed on what to sell. She stated that for 2018/19 SA Tourism had an internship programme. In May 2018 a total of seven interns had been recruited. The internship was for twelve months but could be extended to twenty four months. SA Tourism also became a feeder into the sector.
Ms Bashni Muthaya, Chief Strategy Officer, SA Tourism, on the link between fuel price movement and domestic tourism, said that SA Tourism was aware that economic constraints were the biggest barrier to domestic tourism. There was a definite response to consumer confidence. SA Tourism had done a study to look at what share of the South African consumer’s wallet went towards domestic tourism. What was the consumer’s priority spending?
Mr Ntshona stated that it was amazing how geopolitics could affect the work of SA Tourism. He pointed out that previously, every year 5m Germans used to go to Turkey. After the war broke out in Syria they had to find somewhere else to go to. This was when SA Tourism had to think of innovative ways to capture the tourists. SA Tourism decided to latch onto the Idols Programme which was shot in the Pilanesberg at a game reserve. It was definitely an Idols with a difference. SA Tourism was obliged to take advantage of the opportunity. He stated that SA Tourism invested quite a bit in technology. SA Tourism had a platform that it called Amadeus. People in SA needed to tell their stories. In Sweden promoting tourism was every citizen’s responsibility.
Mr L Magwebu (DA, Eastern Cape) understood what SA Tourism meant by saying that if you grow the economy then jobs would follow. Unemployment in SA was far too high. How did SA Tourism bring new entrants as tourism operators and Destination Marketing Companies (DMCs) into the market? It was a matter close to his heart. He said that the Eastern Cape was a beautiful place and that there were many stories to tell. He felt that DMCs should package the stories to be told. SA Tourism was asked what it was doing to assist persons to become DMCs. He also felt that township tourism held huge opportunities. SA Tourism needed to come on board to assist local people to enter the tourism space. Township tourism should be promoted which in turn could make the economy grow.
Ms Dlamini said that SA Tourism did work with tour operators and Destination Marketing Companies (DMCs). SA Tourism had also started an initiative on tools of hosting. SA Tourism had identified a need to take trade and media around. Hence a hosting pool of individuals was formed made up of amongst others students. It was not staff of SA Tourism that was used. Persons with a passion for tourism were placed on SA Tourism’s database. SA Tourism partnered with the National Department of Tourism (NDT) on how to capacitate tour guides. SA Tourism tried its utmost to expand the contribution to the sector.
Mr Ntshona said that DMCs was a focus area. This was where growth came from. A new element needed to be brought in. Young people who were innovative had to be brought into the industry. SA Tourism also looked at bringing emerging businesses into the sector. There was dedicated staff to carry out the function.
Ms B Mathevula (EFF, Limpopo) asked SA Tourism whether it had a way of bringing young people from rural areas into the tourism sector.
Ms Lydia Mbonde Director: Monitoring and Evaluation National Department of Tourism stated that there were capacity building programmes in rural areas. There was also a programme for unemployed students who studied tourism. The students were now gainfully employed.
Mr W Faber (DA, Northern Cape) was concerned about the limited number of flights to the Northern Cape affecting its local tourist industry. He felt that political stability in a country was important for tourism to flourish. SA needed political stability. Violent strikes were common place due to apparent lack of service delivery. These protests were many a time a guise for criminal activity to take place. These types of things was what turned tourists away from SA. On safety and security, he felt that the National Department of Tourism (NDT) and SA Tourism needed to work more closely with the South African Police Services (SAPS). He asked what training safety monitors received and whether they would be incorporated into the metro police services. A system was needed to be put in place when a crime involving a tourist happened. Often times the perpetrators got away because tourists had already returned home when the perpetrator was arrested. Perpetrators needed to be arrested as soon as possible. Video conferencing should also be considered so that tourists could identify perpetrators. He stated that destination development was important and that in the past ten years he had been disappointed about the Northern Cape Province’s performance on tourism. He felt that the Northern Cape’s tourism department did not market its hidden gems. He felt that SA Tourism needed to push provincial departments on tourism. He pointed out that on international visits abroad members had observed that many of SA’s embassies did not market SA as they should. He pointed out that for instance at the embassy in Malaysia there were only a couple of pamphlets available. More needed to be done. In Berlin however efforts were being made by the embassy. There were stalls marketing SA as a destination. Namibia also had good marketing strategies as their lodges were fully booked. Tourists landed in Cape Town and took connecting flights to Namibia bypassing the Northern Cape. How did SA Tourism intend to have 5m tourists in five years? Would it be done gradually or would the 5m tourist figure be broken down across five years?
Ms Dlamini stated that both SA Tourism and the NDT had transformed their respective organisations. The marketing function was removed from the NDT and shifted to SA Tourism. SA Tourism had embarked on creating support for SA’s missions abroad. SA Tourism realised that the Department of International Relations and Cooperation (DIRCO) already had infrastructure in place abroad. SA Tourism provided tourism training to the DIRCO’s officials. The training was currently being done on an adhoc basis. SA Tourism had also trained 65 officials from the Department of Home Affairs. The intention was for tourism training to be given at the Ambassador Training Academy. She said that SA Tourism worked closely with the South African embassy in Malaysia. The embassy in Berlin was considered a star in SA Tourism’s book. The Berlin embassy was going all out in promoting Mr Mandela’s centenary birthday celebrations. SA Tourism had also seen increases in the numbers of tourists from Poland. The embassy in Poland was vibrant. SA Tourism had hosted two trade delegations from Poland.
Ms Muthaya explained that at the heart of the 5-in-5 strategy sat an econometric model. SA Tourism took into consideration exchange rate fluctuations and changes in source countries. She said that if a target was met for a particular year then it made it easier for the outer years. Economic trends were also looked at. If there were 10m international tourists, SA Tourism had to look at what the provincial space was. SA Tourism took into consideration what the market share across provinces was.
Mr Ntshona, on political stability, said that SA Tourism focused on awareness and positivity. Cash in transit heists and other crimes did affect the numbers and impacted upon the work of SA Tourism. It was difficult as SA Tourism did not function in a vacuum. On whether safety monitors integrated into the SAPS he said that the answer was yes and no. Safety monitors were not officers of the law. They were merely eyes and ears on the ground. Tourists were promised a good experience and all efforts should be made to deliver on the promise.
Mr Londt said that he was concerned about the time it took for the Department of Transport to process licence renewals of operators. Some operators had to wait up to two years for their licences to be renewed. SA Tourism was asked to engage with its colleagues in the Department of Transport over the matter. Operators who continued to operate without a licence would receive fines and pass on the cost of the fines to tourists.
Ms Dlamini, on vehicle licensing processing time being a barrier, explained that there was a workstream for ease of access. The NDT was working on it.
Mr B Nthebe (ANC, North West) on the distribution of the global share of the international tourist market, SA Tourism had stated that the KwaZulu-Natal Province was set to have a 7% target. What was the target set for other provinces? He asked whether one could really tamper with macroeconomics. How did one become competitive on prices? It was all good and well that SA Tourism as an organisation was transformed but what members were interested in was the transformation of the tourism sector. SA Tourism dealt with a multiplicity of stakeholders and hence transformation was needed. SA’s economy needed to be more inclusive. If grading was not seen as a barrier to entry then why was SA Tourism’s revenue from it so little? Did establishments not wish to be graded due to the cost involved? He also asked why the budget for corporate was more than that of business enablement. Why was SA Tourism spending more on consultants than on communication? SA Tourism was further asked why the budget for training & development and for research & development were so little.
Mr Ntshona, on pricing, said that one had to remember that one was dealing with private sector. Whatever leverage one could use against the private sector had to be used. There were countries in the world that had dual pricing ie one price for locals and one price for tourists. In SA dynamic pricing was encouraged. Prices varied in terms of peak and off peak times. Unfortunately private sector did not see domestic tourism as a focus area. Efforts were made to upgrade and beautify ports of entry like airports etc. He said that even land entry ports like Beitbridge with the assistance of the Department of Home Affairs was being beautified.
Mr Tom Bouwer, Chief Financial Officer (CFO), SA Tourism, on why the revenue from grading fees was so little, explained that this was linked to grading assessors. On the number of grading establishments having decreased he noted that SA Tourism did subsidise establishments on grading fees. There was a debate around whether grading should be free or whether it should be compulsory. He explained that research had shown that it was better to invest more in business enablement than in corporate support. On communications he said that media was different. He pointed out that SA Tourism had ten offices abroad and issues arose which necessitated the use of consultants. For instance in London labour matters had arisen which required consultants to be hired. He added that the grading system was UK-based. SA Tourism had however customised its system. He stated that consultants also had to be hired when three of its offices abroad in Nigeria, Paris and Australia required new leases. After SA Tourism had been restructured 1% was set aside for training. A great deal more was invested in internal training. As SA Tourism’s research and development department grew and spent more, more consultants were used.
Mr Nthebe commented that the 1% spent on training did not mean for it to be a ceiling. It could be increased.
Mr Bouwer responded that he was aware that the 1% was not a ceiling.
Ms Dlamini pointed out that SA Tourism was a restructured organisation. The new structure had to be implemented. SA Tourism looked at the results of its skills audit on what the organisation needed in terms of skills. SA Tourism had a staggered approach to capacity building.
Mr M Rayi (ANC, Eastern Cape) asked SA Tourism whether it had looked at the impact of online visa applications. Given that 2018 was the centenary birthday celebration of Mr Nelson Mandela he asked what programme SA Tourism had to attract tourists to SA.
Ms Dlamini, on the Nelson Mandela centenary celebrations, said that SA Tourism had partnered with the Nelson Mandela Foundation on it. SA Tourism had two to three years before developed an electronic application which spoke to the journey of Mr Mandela’s life. SA Tourism had identified 100 experiences across SA. The Madiba story should be used as an opportunity to create awareness of SA. SA Tourism had partnered with trade. She noted that the 100 experiences were packageable. All missions had been taken on board.
Mr Ntshona responded that the Minister of Tourism, Mr Derek Hanekom, was heading up the matter of online visas. A balance was needed between ensuring the security of the country and tourists having free access. He emphasised that tourism cut across all sectors and that all of government had to get on board.
The Chairperson asked how the Committee could engage with provincial tourism authorities. If it was to be done he asked whether it would be beneficial towards tourism development. SA Tourism was asked whether it was pleased with the Foreign Service Bill the way it was since SA Tourism had ten offices abroad. What was SA Tourism doing around T20 cricket? He said that when SA Tourism looked at the amendments to the Tourism Act they should bear in mind that the Committee’s legislative function was limited. The Committee firstly had a number of pieces of legislation to deal with and had a limited schedule for 2019.
Ms Dlamini responded that SA Tourism had not looked at the Foreign Service Bill in detail. Currently staff of SA Tourism deployed abroad did not have diplomatic status. SA Tourism had nine offices abroad and each office was headed up by a South African citizen. The rest of the staff was locally recruited personnel. This was done as there were issues of language and culture that came up all the time. SA Tourism had with the NDT worked on the Tourism Bill. She pointed out that in the Bill what affected SA Tourism the most was SA Tourism as an agency and issues around its Board. There was also the issue around grading. SA Tourism was working with the NDT to deal with issues.
Mr Rayi asked whether SA Tourism had considered the KwaZulu-Natal Province’s request that the Tourism Indaba should be permanently held in KwaZulu-Natal.
Mr Ntshona on Tourism Indaba Policy said that every five years a city/province could bid to host the Indaba. Every province was given an opportunity to bid. Even the KwaZulu-Natal Province had the right to bid again. The Tourism Indaba had to be used as a platform to market SA.
The Chairperson asked that SA Tourism and the NDT keep members informed about upcoming tourism events in provinces.
Minutes dated 13 June 2018 was adopted unamended.
The meeting was adjourned.