Tourism Legacy Report

Tourism

14 November 2018
Chairperson: Ms L Makhubela-Mashele (ANC)
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Meeting Summary

Documents handed out: Legacy Report and Achievements of the Committee -2014 to 2019 (Tabled Committee Reports)

The Committee met to consider the draft legacy report for its term from 2014 to 2019. Key highlights discussed included the funding for domestic tourism, restructuring of the national Department of Tourism and the South African Tourism (SAT), revision of the national tourism sector strategy, establishment of the tourism transformation fund, commercialisation of government-owned tourism facilities, a review of the immigration regulations, improved implementation of the “Working for Tourism” programme and the development of a human resources development strategy for the tourism sector.

The report indicated that the Committee’s focus areas during the 5th Parliament included domestic tourism, transformation, job creation and contribution to the gross domestic product (GDP), support and development of small, medium and micro enterprises (SMMEs), skills development and the relevance of training programmes, quality assurance, support to municipalities, intergovernmental and stakeholder relations, tourist airlifts and the ease of travel and governance.

Key areas for future work included the Tourism Amendment bill, funding for tourism, the TOMSA tourism marketing levy, proposed tourism revenue collection, transformation, the effects of the fourth industrial revolution, tourism infrastructure and safety, complexities of tourism as a concurrent function, geographic spread, affordability, rural and township tourism, marine and coastal tourism, the “Working for Tourism” project, and institutional arrangements for tourism

The main challenges emerging included the legislative and policy environment, regression in the Auditor General’s findings, the decline in international arrivals and domestic trips, delays in the implementation of projects, joint marketing agreements, domestic marketing campaigns, senior staff resignations at SAT, erasing negative perceptions about the country arising from the drought, developing a “China strategy,” wildlife issues, the language barrier for tourist guides, and permits restricting film tourism.

Matters that were raised by Members included the fact that they would like to see the Minister of Tourism more frequently, the need for annual status reports and for follow-ups to take place after oversights had been conducted. Municipalities should be made aware that tourism was part of their mandate, and the budget for tourism in all provinces should be increased. There was a need for integrated working relations with other sectors that affected tourism, such as transport. Concerns were raised about dealing with the influx of Chinese coming to South Africa. It was also recommended that transformation must be prioritised by the incoming Committee.

Meeting report

Legacy Report

Dr Sibusiso Khuzwayo, Content Adviser, Portfolio Committee on Tourism, said that the report was structured so that it showed the key highlights of the Committee throughout the term, the focus areas of the 5th Parliament, issues that it had looked at and areas of future work. These were important sections of the report, and some of the subsequent sections dealt with the statistics of the meetings attended and oversight conducted. He encouraged Members to provide inputs on the key highlights and focus areas if any had been omitted, as well as areas of future work that they thought should be relayed to the 6th Parliament Committee.

Funding for domestic tourism was an issue, and the Committee had identified that very few South Africans travelled. It had requested additional funding from the National Treasury (NT), and subsequently Treasury had appropriated R100 million in 2015/16 and R105 million in 2016/17, which had helped the entity establish a domestic marketing campaign

Restructuring of the national Department of Tourism had been carried out because it was discovered the Department and South African Tourism (SAT) were performing similar tasks. He reminded the Committee about a programme called “International Tourism” that did some of the work that was being done by the entity. This had led to a lack of focus, destination competitiveness and planning.

The restructuring of SAT had also been discussed by the Committee, specifically how SAT conducted its work. A ministerial review had led to the restructuring of the whole entity, and a new focus programme called “Programme Ignite” was established with a strategy that resulted in four million international arrivals and one million domestic arrivals.

Issues such as trends within the sector had not been incorporated into the National Tourism Sector Strategy (NTSS) and the Committee had called for a review, but the review took too long and it ended up being done over a number of financial years. However, in December 2017 a reviewed NTSS was published by the Department and subsequently presented to the Committee.

The establishment of a Tourism Transformation Fund was discussed, and that there was a call by the Committee for the government to establish a Tourism Development fund, but in response the government had established a Tourism Transformation Fund which was being implemented in Parliament in partnership with National Empowerment Fund (NEF). The fund had been capitalised with R120 million, which was R40 million over a period of three years. However, as indicated in the 2018 Budgetary Review and Recommendations Report (BRRR), there was still more money that needed to be capitalised on this particular programme because the Committee felt that it was not enough.

Dr Khuzwayo said that the commercialisation of the government-owned tourism facilities was an issue that the Committee had talked about. There were facilities owned by provinces and municipalities that could be used for transformation, where new entrepreneurs could operate them. This led to the Department conceptualising some interventions and these were contained in the current annual performance plan.

There was also the review of the immigration regulations. Unfortunately in 2014 new regulations were introduced that required unabridged certificates for parents travelling with minors, and this had a devastating effect on the sector. Throughout the years, the Committee had been calling for these regulations to be reviewed. They have since been reviewed, and the changes that were announced by the Minister of Home Affairs recently were part of the economic stimulus focus that was announced by the President. However, it was still going to take the sector a while to recover and the next Committee had to ensure that the promised changes were done, because only announcements have been made.

With regard to the “Working for Tourism” programme, when the Committee started, it was called a social responsibility programme (SRI). As the Committee travelled around the country, it identified issues with many projects throughout the provinces, specifically the conceptualisation and implementation of projects. Other issues included a lack of value for money and shoddy work in terms of construction, so the Committee had subsequently commissioned the Government Technical Advisory Centre (GTAC) to look into this and work had been done to rectify the issues. The SRI had been changed to the “Working for Tourism” programme, and there was a new implementation model where operators were appointed to operate these projects on behalf of communities.

He referred to skills within the sector, as the Committee had identified that the training programmes were fragmented. The provinces were training both the municipalities and the Department, as there was no framework, so the Committee had called for a skills development strategy and the Department had responded by developing the Tourism Sector Human Resources development strategy, which had some good initiatives. These included the women’s empowerment programmes, but more was still expected from the strategy     

Domestic tourism was a focus area that was high on the Committee’s agenda. It had prioritised domestic tourism and advocated for more resources to be made available.

Transformation was another focus area. The Committee had called for transformation within the sector for the Department to go beyond the tourism Black Economic Empowerment (BEE) sector codes and conceptualise programmes that would ensure transformation within the sector. Work had been done in this regard, but more still had to be done.

The Committee had also focused on job creation and the contribution of the sector to the GDP. It had been tracking the NTSS, and the issue of job creation had always been raised with the Department. As a result, in 2017 the sector had contributed R136 billion, which accounted for 2.9% of the total gross domestic product (GDP), while direct and indirect employment in tourism stood at 1.5 million. However, more could have been achieved.

There were many issues raised with the Department regarding support and development for small, medium and micro enterprises (SMMEs). The Committee went to communities and conducted hearings with the public about the SMMEs and listened to the peoples’ complaints. These issues were included in the oversight report and recommendations were made to the Minister. As a result, a lot of good things came out of the interactions, including the establishment of incubators and “hidden gems.”

The training programme focused on gaps identified by the Committee and the mismatch between people who were trained by institutes of higher learning and FET colleges.

Quality assurance was a matter that the Committee looked at throughout, and it referred mainly to grading. A lot of work had been done by the grading council, but unfortunately the council had not been able to improve on a number of graded facilities. A meeting had been held with SAT, where some of the establishments pulled out of the grading system, while others used grading stars illegally. The Committee had said that it was expensive to do the grading and had made recommendations that some incentives should be provided for grading. Funds had been given to SAT, but grading remained a concern.

Support to municipalities was another Committee focus area, and it had discovered that when oversights were conducted there were always issues surrounding municipalities, who were the missing link in the entire value chain in terms of government. The problem was that some municipalities still considered tourism as an unfunded mandate, and therefore insufficient staff were employed for tourism.

Another area was intergovernmental and stakeholder relations, where the Committee was coordinating not only the Department and the entity, but a number of stakeholders. It had a number of meetings with other support entities, like STATS SA in terms of statistics. The Tourism Business Council of South Africa (TBCSA) even had some site meeting with the former and current Committee Chairperson to discuss their work and how it was aligned with the Department. The Committee also had a meeting with the Airports Company of SA (ACSA) to discuss airlift. The Committee had been concerned about airlift specifically, as it was expensive to travel within the country given that some of the towns and cities had one or only a few scheduled flights.

When the Committee started in 2014, there had been a series of issues raised by the Auditor General regarding how the entity and the Department were running their affairs, and these had been cleared up over the years and had resulted in a clean audit, with a slight regression that was experienced last year. This was not a big deal as the issues were easy to rectify and Committee was leaving a portfolio which was healthy in both the Department and the entity.

Mr Khuzwayo said the key areas for future work focused on both the work done in terms of the key highlights, where the work done had not yet been completed, and also on the work that had been done over the past five years that had to be relayed to the new Committee. A request had been made to amend the Tourism Bill since 2015, but this had been delayed till recently and therefore no legislation had been processed by this Committee throughout the term, but this was not because of a lack of trying. The Committee had engaged with the Department very strongly on the matter, but there had been challenges. The Committee wanted to ensure that issues around the sharing economy were incorporated, but there had been a change in the ministry which had resulted in delays. This was an issue that the next Committee would have to look at, because both technological and operational trends globally had overtaken the sector, and there were things that needed to be done quickly. These included the regulation of the sharing economy in terms of the air-bnb establishments.

Funding was another area that needed to be taken forward. Throughout the term, the Committee had been calling on the Department to conduct an economic study in order to find out exactly how much was needed to fund tourism in South Africa.

A meeting was held with the TBCSA and the TOMSA tourism levy was discussed specifically with regard to the levy collectors that were pulling out. The Department spent on average 53% of its budget just on marketing, and the industry had promised to also have core funding. This was an issue that still had to be dealt with and there was also a need to increase the number of TOMSA levy collectors. The Committee had been saying, even in the BRRR recommendations, that the TOMSA levy system should be converted from being voluntary to compulsory, but alternatively the Committee was looking at the proposed tourism revenue collection.

The next Committee also had to focus on the national airlift and ensure that the smaller towns were also serviced by airlines, and that the cost of flying within the country was reduced. The regional airlift and the national airlift had been separated in the report that had been circulated because the feeling was that these two issues were intertwined but separate. The Yamoussoukro declaration still had not been fully ratified by some of the African states, and people still had to fly out of Africa only to fly back to their destinations in Africa.

Transformation was also an area the new Committee had to focus on. Information had been included on what was contained in the 2017 study of the state of transformation report that was commissioned by the Department, and the situation was very dire. Transformation should still become a priority in the programme of the next Committee.

The effect of the fourth industrial revolution on tourism was important, not only to tourism but to many other industries as well. Technology was taking over jobs in tourism. This was seen by the replacement of walk-in travel agents by booking apps, and by tourist guides also being replaced by apps that provided the same information. The next Committee had to find a way to reduce the impact on jobs, because the prioritisation of tourism by government was based on the fact that it was labour intensive. Technology could not be stopped, but there might be ways to ensure that job losses were reduced.  

Regarding tourism infrastructure and safety, Members had noticed a number of problems as the Committee travelled across the country, such as road infrastructure, potholes in roads leading to important sites, and problems with signage. However, the Committee was happy that some of the signage issues had been resolved, but problems such as the maintenance of heritage sites had not yet been resolved

Municipalities still feel tourism is an under-funded mandate, so something must be done differently for municipalities to recognise that tourism was their constitutional mandate as much as it was provincially and nationally. There were recommendations in that regard that the Committee had made to the Minister of Finance, to consider a funding model for tourism at the local government level.

Geographic spread remained a concern, particularly with business events. Most people who come to South Africa visit big cities, and this resulted in provinces that were still not well serviced by international tourism, like the Northern Cape and the Eastern Cape.

Affordability was also a concern that needed to be dealt with. There had been proposals during this term that were aimed at ensuring that the elderly received discounts and the establishment of a dual pricing scheme. Some of the proposals were not approved by the Department but something still needed to be done in terms of affordability.

Conversion of the Visiting Friends and Relatives (VFR) market and business tourists to leisure tourists was a matter the Committee had also talked about, and the new Committee still had to ensure that conversion takes place.

On rural and township tourism, more work still had to be done. There were pockets of excellence here and there in the country, such as Vilakazi Street in Soweto, some outlets in Kwazulu-Natal and Mzolis in Cape Town, but there were still many townships in South Africa that had the potential for township tourism, and this also applied for rural areas.     

The Department had just presented a strategy to the Committee in regard to marine and coastal tourism, but more work still needed to be done.

With the “Working for Tourism” project, there was outstanding work from the GTAC on the final list of projects because of the two phases, phase two was being finalised. There were also Auditor General concerns that the Committee still had to consider.

Tourism’s institutional arrangements were coordinating structures, and the NTSS had these structures laid out to say how tourism should be structured. However, as the Committee travelled around the country there were provinces and municipalities that did not have these structures, which then creates a gap.

The Committee had said that it was not enough for the AG to do financial audits because sometimes infrastructure projects showed good financial management in how money was transferred from the Department to the service provider, only to discover that the problem was with the actual implementation on the ground. Members had seen a number of horrible projects with no value for money at all, so the new Committee should commission performance audits so that it could be established exactly what was happening, particularly with infrastructure projects.

There were reports that were always developed by the Department but never reached the Committee, so it was up to the next Committee to ensure that all these reports that were developed as part of the annual performance plan (APP) were tabled to Parliament. It was not enough for the Department to say reports had been developed without the Committee receiving those reports.    

Tourism and climate change was another area of concern, even internationally. South Africa was a long haul destination in terms of carbon emissions from flights, and there were countries that had begun to implement a carbon tax.

The report identifies key challenges that were emerging in the sector, and these were observations that form part of what needed to be done moving forward 

The legislative and policy environment was constantly changing and the Department and the entity should track those changes and make relevant amendments.

There had been a regression in the AG’s findings, and although there had been a clean bill of health throughout this term, this must be kept moving forward, and the regression must not continue.

The decline in the international arrivals and domestic trips must be tracked, because the fighting crime strategy was falling behind its target.

The Department was showing a trend of delays in the implementation of projects in each and every quarter, and this means targets were not being achieved. The new Committee had to ensure there were no delays in the implementation of projects moving forward.

There were also concerns around the joint marketing agreements, and discussions with the AG had been conducted on how to identify the challenges and also monitor the implementation.

The Committee had said that although there was now some visibility around domestic marketing campaigns, it felt that it was still not helpful in affecting bookings because campaigns were not drilling down to specific destinations and attractions so that people could book.

The resignation of staff at the SAT was a challenge, and the board had promised to investigate this matter to find the reasons behind the resignations.  

The negative perceptions about the country were mainly around the safety and security of tourists, and the mugging and hijackings of entire buses full of tourists had taken place, as well as follow-home crimes from OR Thambo international airport. Negative reporting about the effect of the drought had also led to a decline in arrivals.

A “China strategy” was an emerging issue. Throughout the world, countries were developing a China strategy in order to tap into the Chinese market. About 50% of world travel in future would be dominated by the Chinese market, but South Africa was not ready for that market. Despite the entity saying it was working on it, the Committee felt that there should be a comprehensive China tourism strategy, as this was a very sensitive market in respect of their food and language.

There were supply side constraints, with concerns around Cape Town and the Kruger National Park (KNP), where the Department had reported that in most cases these places were fully booked, and that there were price hikes because of the high demand around these areas. It was necessary to decentralise tourism so that people went to many other places rather than just going to the KNP and Cape Town.

Wildlife was a serious emerging issue in South Africa because of hunting, rhino poaching and also petting of wild animals. This was because the market wanted to see animals in their natural habitat. This had created a challenge that SAT had reported as one of the issues they had picked up.

The language barrier for tourist guides was another concern that had been raised by some of the markets, including the Chinese, and more people had to be trained on the languages of the markets.

Tourism also included film tourism, but there were obstacles around permits.

There were few recommendations given in this report, because all of the recommendations were in the BRRR reports to be given to the new Committee. The few that had been picked out included the prioritisation of the tourism bill, the strengthening of the legislative and regulatory framework, conducting oversight on the impact of the 4th industrial revolution, the issue of the policy shift from voluntary to a free but compulsory grading system, the AG’s  findings, and following up on the 2018 budgetary review and recommendations report.

Dr Khuzwayo said that the other pages contained information that the Members already knew, but in the introduction, there was an acknowledgement of the contributions made by the late Beatrice Ngcobo, who was the former chairperson of the Committee.

Page 20 showed key statistics, which was the number of meetings that the Committee had over the period and the stakeholders the Committee was dealing with. For instance in 2018/19, Members had 26 meetings scheduled, with the current being the 25th meeting.

Page 21 showed the briefings and/or public hearings the Committee had throughout the term.

Page 28 showed that there was no legislation, and this was being referred as a priority for the next Committee. The number of oversight trips that were taken was shown, and this recorded all the oversights by the Committee throughout the term.

Page 35 showed that no study tours were undertaken. There had been some challenges regarding the permission that was not granted for the Committee, and part of the recommendations said that maybe the new Committee should start applying early. There was also some work that had to be done to ensure the House Chairperson knows and understands tourism so that it was taken seriously, because there was a feeling that maybe it was not a priority because the authorities did not understand its value, given that there were offices abroad that needed oversight but this had not been conducted.

Page 36 refers to international agreements that were tabled in Parliament. There had been a meeting with the Department this year where international agreements were discussed, including what would be done about those that were dormant.

There challenges indicated on page 38, where Members had complained that agreements were arriving after being signed, and that was a constitutional problem because it bestowed the power on the Minister to conclude these agreements, and the Committee had to conduct oversight in terms of how the agreements were implemented.

On Page 39, under statutory appointments, the Committee did not have statutory appointments in terms of legislation. However, the Minister had appointed a new board and there were changes this year, so it had included so the new Committee knew it would be working with a new board.

Page 40 showed that there had been no interventions or petitions.

Under obligations conferred on Committee by legislation, the BRRR was included to show that this was the only thing that had to be done as per legislation, and over the years there have been reports where many changes had been made.

On page 42, under other matters referred by the Speaker/Cchairperson, this dealt with the reports that had been received. These were mainly what were referred by the Department to the Committee, such as the strategic plan, the annual performance plan, and the annual report, but there was also the referral of the high level panel report, which had also been processed.

On page 43, under issues for follow up, these were the recommendations that were made by the Committee to the Speaker based on the high level panel report, and that these were also included in the BRRR.

On page 44, there were two recommendations related to the referrals and the oversight visits. One was that the Committee would have to conduct an awareness programme with the office of the House Speaker to provide insight on how tourism works and lobby for support in conducting oversight in South Africa and abroad, . The second was the consideration of lobbying for committees to manage their own budgets instead of a centralised system within the House Chairperson.

The Committee’s entire strategic plan was not included, but a copy of the strategic plan would be provided. However, the main objectives were included here.

Page 46 showed the beginning of the attendance list which recorded the attendance of Members from the first meeting to the last, as of last Wednesday.

Discussion 

The Chairperson thanked Dr Khuswayo, and said she appreciated the work that was done in putting the report together, and that the report reflected what the Committee had worked on throughout the term.

Mr G Krumbock (DA) said that it was an excellent report. It was very useful to have a five-year perspective on the issues that the Committee had been looking at, together with the challenges and successes. The purpose of this meeting was to draw as much as possible from the legacy report as a whole. Looking at the comprehensive report, there was a lot that the Committee had expressed its views on. Some of it showed successes, and this indicated that the Department had taken up the Committee’s concerns. However, there were many instances where the Committee had identified aspects that it was not happy with, and very little had changed. He would have liked to see the Minister more often. Questions were usually asked in meetings and sometimes it took a while for the second meeting to take place, making it difficult to follow up on previously raised issues, and that this had resulted in a list of unresolved issues at the end of five years.

He also asked if there was a way to change the way things were done so that something like a legacy report was produced every year rather than every five years, and then one could see how many of the issues that were raised had been addressed by the Department or by SA Tourism. They would then have an opportunity for a structured follow up of what had been said at previous meetings, He made an example of the renamed SRI projects, and said that the Committee received a presentation by a GTAC entity that had been processed, but that the Committee had not seen those particular officials reporting for a very long time and therefore it was uncertain if the Committee had had any real effect.

He thought it was a fantastic report, but also felt the Committee would be much more effective if it received it on a regular basis, as this would result in fewer unresolved issues at the end of five years.

Ms E Masehela (ANC) thanked the officials for work well done and said that the report had not been an easy thing to compile. She raised a series of issues related to numbering and the need for clarification of sentences. On page 3, where there was reference to SMME support and development, and the establishment of the SMME incubators, the provinces should be included so that the recommendation to the 5th Parliament would be that it should ensure that other provinces also got incubators. She added that it had not always been possible to go back after oversights had been done, so a recommendation should be made that once oversight had been carried out, the Committee should go back after some time to check if the things that had been recommended had been done.      

Ms V Bam-Mugwanya (ANC) thanked the staff for preparing a comprehensive report, She said that there should be a way to transmit the issue of transformation to the next tourism Portfolio Committee. She also asked how policies could be set up so that they woke up the municipalities to know that it was their mandate to be active in tourism, She also supported Mr Krumbock’s idea about yearly reports, because during visits senior people were never around but were able to produce good presentations that did not reflect the situation, and it was discovered only later that the work was not as good as had been reported, so through regular oversight visits and regular reports, mishaps could be identified.

She was concerned about the issue of the Chinese coming into South Africa, as this could lead to overcrowding. The locals tended to be over powered and overcrowded, so this had to be considered carefully. The Chinese that came had to go back home.   

Ms P Adams (ANC) thanked the officials for the excellent work, and asked why the introduction was only on page 13. She knew that that there was a format, but these things should also be questioned. The report should have begun with the introduction, followed by the key areas, The Committee should alert the 5th Parliament that tourism as a sector was greatly influenced by other sectors such as transport, and therefore there should be a more integrated interdepartmental working relationship between the committees.

Ms Masehela said that there was a point about a recommendation to AG to increase the budget for tourism for the lower spheres of government that had tourism as part of their plans. She disagreed with this, arguing that this should be done for all municipalities and provinces whether they had plans for tourism or not, because this meant other provinces would not have tourism projects.  

The Chairperson said that the Committee had listened to all the comments and suggestions for moving on to the future and how the next Portfolio Committee should work. The secretariat had noted what had been discussed and this would be added to the report. The Committee had highlighted the work it had done, but there had been some constraints on oversights, and on how the Committee interacted with both the Department and the entity. There was sometimes a lack of follow-ups on what was recommended, and the next Committee should structure its oversights so that follow-ups were also done. There should also be a status report that would identify issues and ensure that they were dealt with.

Members had suggested future recommendations on how the Committee should conduct its work,  and what was reflected on the report was what the Committee had worked on over a number of years, therefore in principle the Committee should adopt the report. It must also allow for the re-wording of the points that were mentioned, however. The secretariat had noted the points that needed to be reworked, including the use of a proper numbering system instead of bullet points for easy referral.

Members had requested the rewording of the bullet point on transformation. They were not in disagreement with what had been written, but wanted it reworked in such a way that it indicated the status of transformation within the tourism sector as reported by the Charter Council. A legacy report should not only be about what had transpired, but it should be a conversation between Members, and the next Parliament should take the issues to the next level.

The Chairperson requested the Committee to adopt the report.

Ms Masehela proposed that the legacy report be adopted as the report of the Tourism Portfolio Committee, and it was seconded.

It was agreed that the Committee minutes would be considered at its last meeting in the following week.

The meeting was adjourned.  

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