SA Tourism presented its 2019/20 Annual Report achieving 23 out of 37 key performance indicators, with significant progress on four and ten unachieved. Some failures could be attributed to the Covid-19 pandemic and the travel restrictions that ensued.
The Covid-19 pandemic had a deep impact on South Africa’s tourism industry and directly contributed to SA Tourism’s failure to achieve some key performance indicators. There was a 4.2% decrease in arrivals to South Africa from the previous year. Domestic travel exceeded the target of 2.7 million, but travellers increasingly stayed with friends and family instead of at tourist accommodation, bringing down the number of bed stays.
Strides were made in increasing the participation and inclusion of SMMEs in tradeshow platforms and hosting activities. Domestic holiday trips exceeded targets, as did domestic holiday revenue. This highlighted the importance of domestic travel marketing campaigns while there are international travel restrictions and an overall reluctance to travel during the Covid-19 pandemic. SA Tourism’s expenditure for the financial year was 97% of the annual budget. Variances in the individual programmes were largely attributed to the Covid-19 pandemic and its impact on the industry.
Committee members asked SA Tourism about the ways that South Africa could work with countries that most frequently visit the country, to ensure that tourism could thrive again; if it had engaged with businesses about mitigating the threat of closure; as domestic travellers were increasingly staying with friends and family, could SA Tourism work with businesses to reduce their prices and increase demand. Price reductions could attract domestic travellers and increase domestic travel in a time when international travel has slowed down. SA Tourism was asked if it had taken measures to enable small businesses negatively impacted by the pandemic, to gain visibility. SA Tourism was asked about the measures to ensure that tourists would be safe from both crime and the risk of Covid-19; staff turnover and to clarify the conflict of interest between the National Tourism Visitor Information System (NTVIS) and the Tourism Performance Dashboard. Members asked about the signing of the Provincial Memorandum of Understanding and noted the impact that an unsigned memorandum would have on the geographical spread of international arrivals. SA Tourism was asked about what it could do to avoid repeat audit findings. It was suggested that the corporate management of SA Tourism aligned itself with the targets of the National Department of Tourism (NDT). SA Tourism’s collaboration with SMMEs was emphasised as an important focus as domestic travel continues to grow. Women-owned businesses were highlighted as the President's 2021 State of the Nation Address had noted 40% of procurement should go to them. On its collaboration with provinces to attract more domestic travellers, SA Tourism was asked to clarify these programmes.
SA Tourism on its Annual Performance Plan (APP) 2019/20
Mr Sisa Ntshona, SA Tourism CEO, said that until the fourth quarter of 2019/20 and the disruption of Covid-19, tourism in South Africa had been progressing well. The pandemic impacted SA Tourism’s offices around the world including Beijing, China. One of the first areas impacted was the South Africa National Convention Bureau (SANCB) which deals with meetings, incentives, conferences and exhibitions at large convention centres. This was due to a drop in travel from participants who did not feel comfortable travelling. In 2020, there was a 4.2% decrease in arrivals to South Africa from the previous year. It is understood that a traveller’s length of stay contributed to the economy. The length of stay in South Africa by international tourists increased to 16.3 nights in 2019/20, from 11.7 nights in 2018/19 despite the number of arrivals decreasing. However, the number of nights spent at accommodation providers had decreased. Travellers were staying with friends and family in the country and using alternative means of accommodation that were not tracked by SA Tourism. This needed more investigation. Domestic holiday trips increased due to off-peak season product promotions, but accommodation stays decreased due to travellers opting to stay with family or friends. Domestic tourism reached 3.7 million trips, exceeding the 2.7 million target. Better partnerships between SA Tourism and trade meant that more deals and discounts were available to travellers. SA Tourism achieved 23 out of 37 KPIs, made significant progress on 4 and did not achieve 10. Target achievement for the Annual performance Plan 2019/20 was presented:
Programme 1: Corporate Support
The staff satisfaction target score was 3.57 and SA Tourism achieved 3.60. Team alignment sessions and manager training also contributed to this achievement. Labour turnover was set for 8% and 5% was actually achieved. Staff were seen to have found purpose in working at SA Tourism. The vacancy rate was set at 7% but was not met, with the actual achievement being 8%. Compliance with the Employment Equity Act was achieved. SA Tourism received an unqualified audit report. It did not achieve its B-BBEE target Level 4, instead achieving a Level 8.
Programme 2: Business Enablement
Target of four quarterly stakeholder meetings was met, with the actual achievement being 12 meetings. SA Tourism also met the targets of one annual national stakeholder meeting and four quarterly market insight reports. The tourism performance dashboard was developed but the goal of an external launch was not met.
Programme 3: Leisure Tourism Marketing
The target number of 11.4 million international tourist arrivals for the 2019/20 financial year and 11.3 million for the 2019 calendar year was not met. The actual achievements were 10.0 million and 10.2 million respectively. This was attributed to the issue of crime and the risk of Covid-19. As a result, the total tourist foreign direct spend target was not met. There is a linear relationship between arrivals and expenditure. The target number of global impressions from digital channels was exceeded by 226%. There was also a 303% positive deviation from the target number of SA specialist graduates. The target for geographic spread of international tourist arrivals was not achieved, due to a decline in tourist arrivals. The seasonality index target was achieved, with a positive deviation of 7%. SA Tourism set a target of 40% for brand positivity and achieved 39%. Brand awareness also saw a 1% negative deviation, actually achieving 77%. Domestic marketing indicators were largely achieved apart from the seasonality index of domestic tourists. This was because domestic travel was concentrated at peak periods. The KPIs focused on SMME participation and inclusion were both achieved.
Programme 4: Business Events
The target of 115 bids supported for international and regional targets was achieved precisely. The target number of meetings held at Meetings Africa was not achieved. The actual figure was 8 164 meetings, was 40% less than the target of 13 700. The number of meetings held at Indaba was partially achieved, with the annual target being 20 000 and the actual achievement being 18 842.
Programme 5: Tourist Experience
Target for number of graded accommodation establishments was only partially achieved and likewise the target number of graded rooms. The number of officials that attended training did not meet the target of 800.
Financial Performance As At 31 March 2020
Ms Nombulelo Guliwe, SA Tourism CFO, stated just under R1.5 billion was allocated to the five programmes by National Treasury. Programme 1 received R130 million and expenditure was R152 million. The latter amount was 117% of the budgeted amount. Programme 2, which supports the work done by insights and analytics teams, received R80.7 million and the audited amount was R79 million. This variance was the result of suspension of fieldwork due to Covid-19. Programme 3, which hosts the core activities and businesses, received an investment of R960.9 million. This figure was 96% of the initial budget. The impact of Covid-19 on the tourism industry was felt in December 2019 and the decision was made to reduce marketing activates. Programme 4 received R180 million and expenditure was R178.8 million. Programme 5 had R102 million and the audited amount was significantly lower at R77 million. This was due to a decision to suspend hosting due to Covid-19. Total expenditure was 97% of the annual budget.
Ms H Boshoff (DA, Mpumalanga) said that tourism industries around the world have been negatively impacted by Covid-19 and asked about SA Tourism’s engagement with tourism boards of the countries that most frequently visit South Africa. How can these countries, along with South Africa, assist each other to ensure tourism thrives once again and becomes the largest contributor to South Africa’s GDP? On accommodation and domestic travellers increasingly staying with friends and family in other parts of the country to limit their exposure to Covid-19, Ms Boshoff asked if SA Tourism has worked with businesses in the hospitality industry to ensure that businesses can remain open and preserve their employees’ jobs. Should the pattern of domestic travellers staying with friends and family continue, it could mean that many businesses would be closing their doors.
Could SA Tourism engage with these businesses to draw in more domestic travellers by decreasing the price of rooms and other services for overnight stays? What avenues exist to make South Africa more attractive to domestic tourists? Although South Africa is home to many beautiful places, many domestic tourists have not visited them because they are unaffordable. She suggested that transport services such as the Shosholoza Meyl could lower their prices to be more attractive to domestic tourists.
On the tourism businesses that have closed down, she asked if SA Tourism had engaged with them about reopening. SMMEs in South Africa have been unable to attend large trade shows and promote their products and services. Has SA Tourism taken measures to help these businesses in gaining more visibility and profit. On safety against crime and Covid-19, she asked if there was a plan to ensure that both were ensured for tourists.
Mr M Mmoiemang (ANC, Northern Cape) noted with concern the resignation of 13 staff and asked for a reason why the number was so high. This could be an indication of instability at a management level and could impact the governance of SA Tourism. However, he did acknowledge that two of these resignations were due to contracts expiring. He asked for clarity on the conflict of interest between the National Tourism Visitor Information System (NTVIS) and the tourism performance dashboard, and if this conflict could be managed. The failure to launch the dashboard has been attributed to the NTVIS. Is the system owned and managed by SA Tourism or by an external entity?
Mr Mmoiemang acknowledged the complexity of the Covid-19 pandemic and its impact on SA Tourism’s ability to meet its targets under Programme 3. He asked if the Provincial Memorandum of Understanding had been signed. If not, this would have an impact on the geographical spread of international arrivals to South Africa and would further impact SA Tourism’s ability to meets its targets. He asked what it could do to avoid repeat findings in the audit at the end of the financial year.
Ms B Mathevula (EFF, Limpopo) asked if it had measures in place to ensure South Africa is safe for tourists.
The Chairperson suggested that the corporate management of SA Tourism align itself with that of the Department. It would do well for the Department to include the indicators that SA Tourism had included and vice versa. The Department mandated that its vacancy rate should not exceed 10%. Had SA Tourism employed the same figure, perhaps it would not have failed to meet this particular target.
On employment equity, the Chairperson asked about the number of women and people with disabilities serving in senior management positions. What is the target for the workplace skills plan? On corporate management, the Chairperson asked for the performance indicator for its communications strategy. The Department achieved its 30% expenditure on the procurement of goods and services from SMMEs. As the National Department of Tourism (NDT) and SA Tourism (SAT) develop their 2021/22 Annual Performance Plans, the Chairperson reiterated his suggestion of cooperation.
Women-owned businesses were a focal point in the State of the Nation Address, with Cabinet agreeing to set aside 40% of public procurement to go to them. This should be included in SA Tourism’s Annual Performance Plan. On SA Tourism’s collaboration with provinces, the Chairperson asked about the work being done on the ground. Going forward, SA Tourism would need to clarify how these programmes are developed and implemented in the provinces.
SA Tourism response
Mr Siyabonga Dube, Board Chairperson, SA Tourism, said that some questions would be directed to the National Department of Tourism (NDT), which would respond in writing.
Ms Sthembiso Dlamini, Chief Operating Officer: SA Tourism, said SAT was working alongside the provinces to develop a communication strategy to address the key variants that were impacting performance. The issue of awareness, which includes affordability and access to information, was addressed through platforms that had a reach to target audiences. The message of one such campaign was that the country was there for locals to enjoy it. It aimed to instil pride in South Africans and prompt them to start travelling. South Africans appeared receptive to domestic travel discounts and specials, so SA Tourism had developed partnerships with products, experiences, airlines and other actors in the private sector to spread the message that South Africa is accessible to its people. Some travel discounts have been up to 50% off the original price. SA Tourism also worked with many tourism service providers to increase their appeal to South Africans. Before this, the sector and its actors were heavily focused on the international market. Most importantly, there has been a valuable collaboration with provinces. Provinces bought into the message of South Africa belonging to its people and developed it further by focusing specifically on what each province had to offer. This was part of a consistent message which proved to yield favourable results.
On SA Tourism’s engagement with the sector to develop and adjust for the local market, Ms Dlamini replied that in recent times, products and attractions have adjusted their cost structures around significant dates such as Valentine’s Day and Easter. Discounts and specials were also recorded for the festive season for South Africans. Another valuable initiative was the introduction by tourism service providers of different payment options such as laybye. Travellers could save up for their trips and pay for the expenses over a set amount of time. On small businesses and trade shows, Ms Dlamini acknowledged that some of these businesses could not afford to participate in trade shows. In 2020/21, SA Tourism has been finalising a new business-to-business portal or marketplace. This portal would be a database of products in South Africa. Smaller businesses providing products, services and experiences would sign up to this portal and that would eventually connect them to consumers. The interface with consumers would drive business-related traffic and increase awareness of these businesses. Beyond awareness, consumers would be able to transact and purchase products, services and experiences on the platform. It would provide an alternative space for SMMEs to benefit from awareness, traffic and transactions if they could not afford to participate in trade shows. Before the Covid-19 pandemic, SA Tourism participated in eight strategic platforms internationally and would set aside space for SMMEs. This was done in collaboration with the Department and SMMEs that were ready for market access were identified for exposure.
On employment equity, Ms Dlamini reported that 63% of SAT staff establishment was women. In international offices, 63% of the staff were women and in the internship programme, women represented 65% of the establishment. This metric is constantly tracked and is part of the Annual Performance Plan. It is also reported quarterly to the Board. The Chairperson’s suggestion of including indicators mentioned in the State of the Nation Address was welcomed. The 13 resignations were not a sign of instability at a management level. The level of staff engagement had improved year after year. SA Tourism had a high rate of retention from employees. The average time spent at SAT was around 10-15 years. Most of the 13 resignations indicated in the Annual Report were due to employees receiving promotions elsewhere. This indicated that SA Tourism is a place for growth and learning.
Mr Mzilikazi Themba Khumalo, Chief Marketing Officer (CMO): SA Tourism, said that SAT revived a forum comprising of the CMOs from each provinces’ tourism authorities, SA Tourism and the Department. This was done to coordinate a collective marketing effort. In doing so, two significant achievements were made. First, there was the integration of messaging to achieve consistent communication from the provinces and align it at a national level. Tourism happens on the ground, so this communication was vital. Secondly, there was a collaboration with the provinces to collect content to be used in marketing campaigns. Before Covid-19, people in the marketing content were not wearing masks and observing Covid-19 protocols. Content that was sensitive to the realities of the pandemic was recollected, showing people wearing masks and practising social distancing measures while enjoying tourist attractions. This was achieved in a joint campaign at the end of 2020 and will continue into 2021. Going forward, time would be spent with the CMOs to ensure the efforts are not duplicated and that new ideas are developed.
On collaboration with product owners, Mr Khumalo said that while running the campaign at the end of the year, there was an SMME workshop in each province to get a better idea of the situation on the ground and teaching skills in business survival. Most SMMEs did not have a digital presence and were projects of corporate social investment of larger establishments. Business was concentrated in these larger establishments and SMMEs were unable to cope due to their lack of digital presence. Those who did have a digital presence did not possess sufficient digital marketing skills to leverage their presence after the beginning of Covid-19. SA Tourism worked with product owners as well as the Department to address this because this will benefit the tourism industry when international markets eventually reopen. These SMMEs would be able to compete in the market and drive domestic tourism in the meantime.
Mr Khumalo emphasised the importance of young people in the era of social media and digital activism. Even when international travel resumes, domestic tourism should remain a focus. By adjusting costs and making domestic travel cheaper, product owners would be able to ensure the current and future patronage of young consumers and create a competitive domestic market. By providing these incentives to travel, the domestic market would be able to remain competitive if international travel were to be restricted in the future. The vision should be sensitive to the times of digital activism and should be inclusive of all generations of travellers. On stakeholder and media engagement, SA Tourism was focused on forging new relationships and maintaining existing relationships to ensure there would be a platform to develop when international markets open.
Ms Amanda Kotze-Nhlapo, Chief Convention Bureau Officer (CCBO) at SA Tourism, said that while meetings and conventions came to a standstill, alternative opportunities were seized. New businesses across different sectors were created that catered for virtual conferences. People were unable to attend these conferences directly, but virtual meetings have allowed different activities to continue.
On collaboration between SA Tourism, the Department and the provinces, the tourism authorities who oversee the maintenance of conference and meetings spaces came together quarterly to discuss the management and marketing of South Africa as a meeting destination. One of the projects being developed was the Association Programme, where 27 small towns were identified as potential hosts for smaller meetings. The goal would be to eventually hold medium conferences in these towns after they build their capacity. This would help spread business over the provinces. SA Tourism launched a project in the Eastern Cape, called the Basic Quality Verification. It could identify smaller, unique products such as homestays and draw them into the mainstream. The project would ensure that these products were quality-assured.
On Covid-19 safety, Ms Kotze-Nhlapo replied that SA Tourism launched a programme focused on information on Covid-19 safety measures to assure travellers that it would be safe and that product owners adhere to the necessary protocols. By the end of the current quarter, the goal would be to roll out 30-40% of graded establishments within the Covid-19 support programme. The industry, with which SA Tourism has closely worked, hosted several events geared towards demonstrating the application of protocols and making sure that people can attend meetings at these venues. The industry is ready to host physical meetings and those of a hybrid nature once Covid-19 restrictions are eased. Being online helped to ensure that SMMEs joined digital platforms and were able to learn how to participate in larger trade shows.
Ms Guliwe replied that one of the key decisions taken when finding ways to support product suppliers was to suspend grading fees for members who are part of the grading establishment. While it was not a large amount, it still contributed to a decrease in input costs.
To avoid repeat findings on the audit under Programme 5, Ms Guliwe said that there were mitigation strategies to track remedial action on audit findings. An internal audit function would deal with this independently and they would be reported to the audit committee quarterly.
Mr Tony Nkadimeng, Head of Government Relations: SA Tourism, replied that performance-based agreements were developed based on past interactions. These agreements would factor in performance areas instead of looking at memorandums of agreements from activity-based arrangements. Provincial arrangements are part of the areas of work done by members of the Executive Committee. In addition to CMO-level forums, forums at a CEO- and Chairperson-level have been sites of engagement. These engagements have been used to look at more effective implementation of the memorandums of understanding. The Covid-19 pandemic created an environment of increased engagement and collaboration. Moving forward, there will be new approaches with provinces.
Mr Ntshona replied about engagement at a continental level, saying that he was part of a CEO forum of African tourism authorities. A few years ago, they converted the Indaba, Africa’s largest tourism trade show, to Africa’s Travel Indaba. South Africa participated in several tradeshows elsewhere on the continent, such as Ghana via webinar, and Rwanda. He emphasised that South Africa’s recovery was linked to the recovery of the continent. Pricing and affordability in a free market are up to businesses to determine, but supply and demand forces have changed in the pandemic. Prices varied among product owners, but capacities remained full. On smaller product owners being unable to attend trade shows, a unit called Speed Marketing has driven up engagement to ensure that they are connected to the tourism industry.
Mr Dube replied that the questions on tourist security and Covid-19 response initiatives would be submitted in written form.
Ms Boshoff asked when the business-to-business platform would enter its first phase of implementation or if its implementation had already begun.
Mr Mmoiemang raised his earlier question on the conflict of interest between the NTVIS and the Dashboard.
Ms Dlamini replied that the business-to-business platform would be launched by 31 March 2021. The testing phase was in the process of being concluded. Scale would be built in the first quarter of 2021/22 to allow SMMEs to begin registering.
Mr Ntshona replied that the NTVIS was an off-set agreement entered into by Amadeus, a supplier of Global Distribution System (GDS) equipment to South African Airways and the South African Air Force, and the Department of Trade and Industry (DTI). This agreement entailed setting up a database of activities within the tourism space for the tourism industry. DTI signed an agreement with the Department of Tourism. There was a lack of clarity on the ownership and propriety of this database once Amadeus left the country. Does it belong to Amadeus or does it belong to South Africa as well? These questions were not addressed. There was also potential price hikes once the obligation of the off-set agreement was met. The future of NTVIS would be dealt with at the level of DTI. The business-to-business portal was an example of an alternative explored by SA Tourism.
The Chairperson said there would be a meeting with the Department on the Annual Performance Plan and unanswered questions would be passed on. The Tourism Equity Fund had been dealt with as part of the Department Annual Report, but a detailed presentation would still be shared.
The meeting was adjourned.
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