State of Nation Address impact on tourism sector


13 February 2019
Chairperson: Ms L Makhubele-Mashele (ANC)
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Meeting Summary

The Content Advisor of the Portfolio Committee on Tourism presented an analysis of the State of the Nation Address highlighting the implications of the pronouncements by the President on the tourism sector. In relation to the rest of the world, South Africa was behind on its targets and the latest figure that he had for 2018 showed 9.46 million arrivals out of a targeted 10.95 million annual arrivals. The slow pace of the tourism sector had negative consequences on the socioeconomic issues in the country as the sector played an important role in resolving those issues by creating jobs.

Destination accessibility had become a problem with the stringent visa requirements. The recently announced visa reforms had not been fully effected by government and had a direct impact on the tourism industry. The tourism industry had also felt the impact of the immigration policy that remained a challenge to the industry.

Africa’s Travel Indaba was rescheduled for 2 to 4 May 2019 as the original dates clashed with the date announced for the national elections, 8 May 2019. The briefing discussed the China and India strategies and how South Africa could tap into those markets. The President had suggested that China should not be treated like any other market as it provided great opportunities for the tourism sector. Crime in South Africa affected that opportunity as Chinese tourists were concerned about safety when travelling to another country. There were growth prospects as a result of the resuscitation of the Mumbai air route.

The Fourth Industrial Revolution was discussed in relation to the tourism sector and how the new way of conducting business would impact on the human element of the sector as tourism was labour intensive. The Fourth Industrial Revolution called for government and the private sector to rethink how it conducted business with special attention to rolling out the broadband technology and going digital with many aspects of the tourism sector. It also meant that jobs in the industry might be replaced by technological advancements. The other concern was how the virtual incubator programme would be implemented in the rural areas and how it would accommodate the small business operators who needed face-to-face interaction and help with their businesses. A concern was the fact that there was no plan in place to absorb the rural and township small businesses in the Fourth Industrial Revolution.

Members noted that the President had stated that jobs would be created by tourists coming to the country. Was there a plan in place to train people in rural and township areas to adjust to the Fourth Industrial Revolution? Was there a plan to accommodate disadvantaged people? Were people trained, and was there capacity to adjust the human element of the tourism sector to the Fourth Industrial Revolution? The Members were divided in opinion as to whether the Fourth Industrial Revolution would result in job losses. One Member requested a briefing by a person who had expert knowledge of the Fourth Industrial Revolution.

One Member who also sat on the Home Affairs Committee expressed concern about the devastating effect that tightened visa controls had had on tourism. She asked that there be ongoing engagement with Portfolio Committee on Home Affairs to address those issues. Other Members advocated for the involvement of the National Department of Tourism when the Portfolio Committee on Home Affairs discussed immigration policy as it had direct implications for the tourism sector.

One Member asked if it was possible for the Department of Transport to deal with the fact that Mthatha Airport had been closed for three weeks as that was impacting negatively on tourism in the area.


Meeting report

Opening Remarks
The Chairperson welcomed the Members of the Portfolio Committee on Tourism to the first Committee meeting for 2019. She spoke for the ANC on how optimistic she was for the upcoming elections on 8 May 2019.

The Chairperson stated that the focus of the meeting was to analyse the President’s State of the Nation Address (SONA) with a focus on issues that pertained to Tourism. She handed over to the Committee Content Advisor, Dr Sibusiso Khuzwayo, and Committee Researcher, Ms Sisanda Loni, who had analysed the SONA implications for the Portfolio Committee on Tourism.

Analysis of the State of the Nation Address (SONA) – reflection on issues impacting on the tourism sector
The Content Advisor informed the Members that other Portfolio Committees did not do such an analysis after of the SONA. He also realised that issues impacting Tourism were not usually included in the address by the President.

He began his presentation with a global snapshot of the Tourism industry, noting that the international tourism industry was growing at a fast pace and he was concerned that the industry’s growth in South Africa was not keeping up with the pace. Despite the slow growth rate, the tourism sector had been impressive in providing employment, however, a lot still needed to be done.

The Content Advisor used the South African Tourism (SAT) performance dashboard figures to analyse the international and domestic performance of the tourism industry. The figures showed that South Africa had not been meeting its targets, but SAT was anticipating more growth in the industry at an international level in the next few years. In 2018, the arrivals performance target was 10.95 million and in September when the SAT had produced the figures, there had been 9.46 million arrivals. He was not optimistic that South Africa would reach the target for 2018, despite the period of September to December being peak season for the tourism sector. The arrivals had a direct impact on spending by tourists which had consequently not met its target. The 2018 target for domestic trips was also not met. Only 13 million trips were recorded against the target of 25.56 million.
The socio-economic impact of the sector lay in the international and domestic performances of the tourism industry. At Business Unity South Africa‘s Business Economic Indaba, the private sector had told the President that more collaboration was needed between the government and the private sector. Key concerns were the decline in forward bookings, the China/India focus, infrastructure, vehicle permit issues, and immigration.
The slow implementation of the new visa reforms had caused frustration for tourists and impacted negatively on the tourism sector. The problem was the pace at which changes, and improvements, were implemented by the government. He mentioned the Cape Town Airport R 7 billion upgrade which was due to commence in 2020 and should attract more tourists while setting a new benchmark for airports. It was a good model which should be replicated in other provinces.

Tourism remained one of the important sectors in terms of creating jobs. The tourism industry had a positive socio-economic impact, with a special focus on job creation. He stated that the sector needed to grow as it was labour intensive and supported 700 000 direct jobs and 1.6 million indirect jobs. The Content Advisor noted the talks of reconfiguration of the government and said that the consideration of merging the sector with the Department of Environmental Affairs was an example of how strong the focus was on the environment. He, however, pointed out the threat to the jobs created by tourism should the tourism sector be merged. National Treasury should acknowledge the socio-economic impact of the sector in the country and provide the necessary support to stimulate more growth. The tourism sector should be recognised as an export sector as the sector brought in direct foreign investment. Recommendations had been made by the Committee to National Treasury to get more funding.

South African Tourism (SAT) needed to develop a strategy to tap into the Chinese and India market. He also raised the safety concern that negatively affected the tourism sector. South Africa was not a desirable destination due to escalating crime statistics.

It was important for SAT to move with the times and to get on the Fourth Industrial Revolution wave by making sure that the destinations in South Africa were tech-savvy. He referred to Wi-Fi as important in capturing real time moments to advertise the country. SAT was working on a country-wide destination app to make things easier for tourists. As much as technology would help facilitate growth in the sector, it would also have a negative effect. The technology that came with the Fourth Industrial Revolution would be a threat to the sector jobs such as tour guides and travel agents that could be replaced by the technological advancement in the tourism sector. Apps like Trivago and Airbnb were replacing the human element in the sector and a lot needed to be done to reposition tourism to move with technological advancements without losing the human element. The National Department of Tourism (NDT) and SAT had to maintain the human element in the sector.

The NDT had developed a strategy as the tourism sector had been left out of the initial programme of Operations Phakisa. The Marine Tourism Lab had been convened with several stakeholders, but Parliament needed to follow up on implementation. The challenge of the inclusion of small coastal towns in the strategy persisted and the NDT needed to include the small coastal towns. NDT had to show the progress made in securing concessions for emerging black operators, as recommended by the Committee.

Africa’s Travel Indaba, scheduled for 8 May 2019, the same day as the elections, would be re-scheduled. SAT had to engage the Department of Trade and Industry on a suitable date as the “We are Africa” trade show was scheduled for 13-16 May 2019.

The Content Advisor suggested that NDT should indicate how tourism would be incorporated in the small business initiatives. He was concerned about the scaling down of the Tourism Incubator Programme. The NDT presentation to the Committee had indicated no scaling down, but NDT was moving in the direction of virtual incubators. There needed to be more clarity on the issue as the announcement by the President in SONA contradicted the plan presented by NDT to the Committee on Tourism Incubation Hubs. The impact of the Fourth Industrial Revolution on the incubators was a concern.

The President had alluded to the devastating effects of global warming and how it had affected tourism. The base of South Africa’s tourism sector was wildlife, coastal tourism, and scenery, all of which were susceptible to climate change. The Content Advisor suggested that the Committee would benefit from a report on the progress made on the implementation of the National Tourism and Climate Change Response Programme and Action Plan of 2011.

The Content Advisor recommended that the Committee engage the Minister of Tourism on the following:
- the implementation of the new visa reforms
-development of the China and India tourism strategies
-inclusion of tourism in provincial investment books and in brochures; embedding private tourism in the investment missions
-the impact of rescheduling Africa’s Travel Indaba
- the preparedness of NDT and SAT for the Fourth Industrial Revolution
-the recovery plan to meet the 5-in-5 strategy targets by 2021.

The Chairperson addressed the issue of the rescheduling of the Indaba, and stated that the Indaba had been moved to 2 - 4 May 2019, according to the statement issued by the SAT. She said that many people believed that the Fourth Industrial Revolution should be an opportunity to rethink the jobs and how business was conducted. She suggested adopting a perspective that the Fourth Industrial Revolution did not threaten jobs, but it enhanced jobs and the policymakers should reposition and rethink the strategies around the Fourth Industrial Revolution.

Mr S Bekwa (ANC) appreciated the presentation by the Content Advisor. He was concerned about the Fourth Industrial Revolution. He was looking at the history of the country, and the current policy of an inclusive economy. The President stated that jobs would be created by tourists coming to the country, but little had been said about how people would benefit from those jobs, especially those in rural areas and in the township economy. Was there a plan in place to train people in rural and township areas to adjust to the Fourth Industrial Revolution? Was there a plan to accommodate disadvantaged people? Were people trained, and was there capacity to adjust the human element of the tourism sector to the Fourth Industrial Revolution?

Ms V Bam-Mugwanya (ANC) thanked the Content Advisor for making matters clearer for her. She was a bit disappointed by what the President had not said about the tourism sector. The President gave pointers had not delved into the how-to of things. He had not said how the small operators would be uplifted, besides having access to incubators. She also expressed her concerns on virtual incubation being implemented in rural areas. A lot more needed to be done, especially for small rural operators. She believed that that the Fourth Industrial Revolution was going to impact negatively on the number of jobs. She was somehow at a tangent from what the Chairperson thought about the impact of the Fourth Industrial Revolution. After seeing what the Council for Scientific and Industrial Research (CSIR) was doing, she really thought it would be extremely difficult for small rural operators to adapt, but that did not mean that the sector could remain primitive and rural people would eventually have to move with the times and adapt.

Ms Bam-Mugwanya was saddened by the closing of the Mthatha Airport for three weeks because of the incompetence at the airport. Travel had been suspended because the airport had not been complying with regulations. People had struggled long before the new airport was built and still people were disadvantaged when travelling to areas that could only be reached by passing through that airport. Tourism had been negatively affected by the closure and was causing inconvenience to travellers to that area. She suggested that someone engage with the National Department of Transport to try and find solutions to the problem.

Ms S Nkomo (IFP) referred to the Fourth Industrial Revolution and made a recommendation that the Chairperson invite an informed person to address the Committee on the topic of Fourth Industrial Revolution and the concerns that the Committee had in that regard.

Ms Nkomo expressed her apologies as she also sat on the Portfolio Committee on Home Affairs but when that Committee had addressed the matter of the visas, it had never sat down with the Portfolio Committee on Tourism to discuss the some of the issues with visas. She now saw the seriousness of those issues and how they had negatively affected the tourism sector. Tourists were discouraged by the strict visa regulations and were often forced to turn back with the money they would have spent in South Africa. Tourism should have been included in the discussions on the visa regulations. She recommended a discussion with the Portfolio Committee on Home Affairs.

Ms Nkomo addressed the matter of bringing in people from China to train those in the tourism sector in Chinese to be able to address issues affecting Chinese tourists and to talk to the tourists. She was also impressed by the way the Committee was addressing the SONA and wished that other Committees would follow suit.

The Chairperson indicated that she needed to wrap up the meeting before the House sitting. Issues raised by the President were to be put into a programme of action by NDT and the Committee’s role was to monitor implementation and progress.

The Chairperson stated that draft minutes would be discussed in the next Committee meeting.

First Term Committee Programme, 2019
The Committee Secretary said that the programme had been drafted in December 2018 based on the guidelines received from the Office of the Speaker. On 31 January 2019, the National Assembly Programming Committee had advised Committees to complete their programmes by 20 March 2019 to enable Members of Parliament to assist with the campaign programmes outside Parliament. The implications of the change to the Portfolio Committee on Tourism was that the Provincial Oversight Visit to the Northern Cape fell away. No Committee activity was planned for 20 February 2019 as that was Budget Day. The agenda for 6 February 2019 had been added to the agenda of the current meeting. He proposed that the programme be left as it was, taking note that Parliament would rise on 20 March 2018.

The Chairperson thanked Members.

The meeting was adjourned.


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