The Committee met virtually to hear South African Tourism’s (SA Tourism) briefing on its fourth quarter 2020/2021 performance report. The Deputy Minister of Tourism was also in attendance.
The presentation yielded that SA Tourism it achieved 24 of 28 Key Performance Indicators in the quarter. The bulk of the SA Tourism income (about R443 million) came from the Department. The entity generated R18 million during the fiscal year, which was mostly linked to incentive programme funding. There was a large amount of spending in media, during the lockdown period in 2020.
In the absence of international travel to South Africa, Members emphasised the importance of marketing the domestic market and regional travel within Southern Africa. Members lamented that there is a need for greater inclusion of small towns and settlements in tourism, pointing out that there has been a lack of adequate marketing in this regard. It was noted that the tourism sector is in the preliminary stages of recovery, and that the recovery is acutely sensitive to changes in the COVID19 regulatory framework and the vaccine programme.
Members stated that there needed to be greater collaboration between the Department of Health and SA Tourism to position South Africa as a safe travel destination in SA Tourism’s efforts for tourism advocacy abroad.
The Deputy Minister addressed Members concerns about SA Tourism’s impending merger with Brand South Africa and the Chief Executive Officer vacancy in this regard. He stated that, although there is consensus that SA Tourism and Brand SA must be amalgamated, the details pertaining to the amalgamation are yet to be finalised.
The Chairperson spotlighted the importance of domestic Tourism in recovery and alleviating poverty in small towns and settlements, stating that the “dorpie specific” travel products needed to be made to address this need.
The Chairperson opened the virtual meeting and welcomed Members after making opening remarks. He also welcomed South African Tourism (SA Tourism) delegates, and allowed the executive personnel to proceed with the presentation.
Briefing by South African Tourism: Q4 performance 2020/21
Ms Sthembiso Dlamini, Acting Chief Executive Officer of SA Tourism, thanked the Chairperson for his opening remarks, and outlined the contents of the presentations. She explained that the presentation aims to provide an environmental analysis, which will provide a better understanding of the SA Tourism’s progress in meeting its targets in 2020. The presentation will also highlight the impact of COVID19 on financial performance and the endeavours that have been made towards recovery.
She stated that the tourism sector is still in the aftermath of the COVID19 outbreak, lamenting that the continual arrival of new variants has made it especially difficult to make progress. However, the tourism market has shown resilience, particularly in the domestic market, but there continues to be hesitation for non-essential travel domestically. The second wave reduced demand significantly on a national and global level.
Ms Dlamini stated that the SA Tourism has adopted a strategy of marketing day trips and short trips in response to the impact that COVID has had.
Ms Dlamini explained that there has been a reduction in domestic airline flights between 50% and 80%, followed by a substantial increase in light motor vehicles travel. This shows that people have been more comfortable with driving rather than taking a flight, during the pandemic. She mentioned that a steady recovery has been observed from the beginning of the current alert-level three of lockdown, as travel restrictions have been eased. However, she pointed out that, in spite of this, travel during last December was 60% lower than travel in 2019.
Ms Dlamini stated that there is a significant reduction in the occupancy level, which is observable as a reduced daily occupancy rate.
Ms Dlamini stated that SA Tourism has adopted a strategy that will optimise and maximise spending in a coordinated manner to mitigate some of these challenges. She added that the data shows that much of this spending will be recovered as international travel resumes.
Ms Dlamini explained that the hospitality industry has borne the brunt of hard lockdowns, particularly the restaurant and catering services. But there have been significant signs of recovery under the relaxed regulations.
The Acting CEO spotlighted that, in the wake of the pandemic and travel regulations, 90% of the total arrivals have been from other African countries. This shows the importance of regional travel and its potential capacity for growth.
Ms Dlamini further explained that the forecast for the immediate future reveals that recovery is most likely to first begin domestically before increases in international and continental arrivals are visible.
Ms Dlamini stated that, in the aftermath of the pandemic, to make greater strides towards recovery there needed to be greater advocacy for African and SADC regional travel. She added that this required a creative positioning of the South African tourism sector amongst travel advisories.
Ms Dlamini explained that there needed to be greater collaboration with the public for capacity building, and to ensure that the work force is engaged with the opportunities that African and regional travel presents.
Key Performance Indicators and Financial Performance
Ms Dlamini presented SA Tourism's progress in implementing the Key Performance Indicators (KPIs), stating that there was a total of 28 KPI programmes of which 24 were achieved in the quarter under review. She provided an overview of the KPIs and highlighted considerable progress in all the programmes except for two KPIs which were not met. She explained that there were errors reported, which hampered implementation of audit recommendations at the end of the financial quarter.
Mr Nombulelo Guliwe, CFO, SA Tourism, presented a general outline of the financial performance for the quarter. He stated that the bulk of the income amounted (about R443 million) came from the Department. SA Tourism generated R18 million during the fiscal year, which was mostly linked to incentive programme funding. There was a large amount of spending in media, during the lockdown period in 2020. This was done in effort to keep the South African brand alive, and to maintain a presence in other countries during pending the end of the lockdown.
Mr Guliwe provided a breakdown of the financial reports, before handing over to the Acting CEO Dlamini for final remarks.
Ms Dlamini explained that SA Tourism has embarked on a policy review to ensure compliance with the Act. In her closing remarks, she explained that the tourism climate is still fluid, and it continues to shift according the COVID19 regulations. It is important that legislators create regulatory framework that is can still maintain a working business environment, especially in the tourism sector. SA Tourism continues to cooperate with the Department in this regard. She stated that the main short-term goal is advocating for South Africa to be removed from COVID red zones, so that international travel to South Africa can resume.
Mr Enver Duminy, Chief Executive Officer, Cape Town Tourism, summed up the presentation as follows:
South Africa is still on the way towards recovery as a tourism destination. The unpredictable arrival of new, more infectious variants has made recovery more challenging. However, the South African Tourism industry has proven to be resilient in weathering out the pandemic and continues to adjust and adapt to the ever-changing conditions. SA Tourism is confident that the vaccination rollout will assist in assuring to an international community that it is safe to travel to South Africa, while complying with regulations.
The Chairperson thanked SA Tourism for its comprehensive presentation, and invited Members of the Committee to make their contributions.
Mr K Sithole (IFP) highlighted that SA Tourism spent more than was forecasted, and asked for further explanation in this regard. He felt that domestic tourism marketing was lacking, asking what SA Tourism’s marketing strategy pertaining to domestic tourism is. He asked whether there was any collaboration with the Department of Health in monitoring the vaccine rollout, as this is a matter of interest for tourism.
Mr M De Freitas (DA) asked for more information from the international office on the impact of the lootings on SA Tourism. He lamented that rural areas are undermarketed for tourism and asked what the marketing strategy was and how the issue can be mitigated.
Ms M Gomba (ANC) asked a question pertaining to the inclusion of townships, rural towns and villages in tourism, stating that these communities are rich in cultural heritage and that there is immense potential for growth.
Ms Gomba asked about interprovincial travel marketing. What measures can be taken to make this a more attractive travelling option? She also asked for clarity on whether international travel to South Africa has resumed, specifically asking whether airlines are allowed to travel to South Africa. She reiterated Mr Sithole’s question of whether there are any collaborations between SA Tourism and the Department of Health.
Ms H Winkler (DA) asked whether there has been any collaboration between the international community and South Africa on the standardisation of the health passport. Ms Winkler asked about what the outcome of the tourism advocacy collaboration with the Tourism Business Council of South Africa was.
Mr P Moteka (EFF) asked about the CEO recruitment process, noting that the position is still vacant.
Ms S Xego (ANC) stated that she welcomed the fact that SA Tourism was hesitant in taking on long leases, given the uncertainty of the times. She asked for more clarification on the recruitment process. She noted that the tourism sector is acutely vulnerable to changes in the regulations, and pointed out that Tourism will be affected at all lockdown alert levels.
Ms Xego had made some observations about the financial report, and expressed that she is satisfied to adopt the report.
The Chairperson thanked SA Tourism for investing time and resources to produce their report, and commented that it was satisfactory.
The Chairperson asked about the amalgamation of SA Tourism and Brand SA, stating that this process should be concluded timeously, as this may have a significant impact Tourism. There is a need for certainty.
Recruiting of the CEO
Mr Duminy responded that this is a matter that is being taken seriously, and that recruitment is still in progress. He explained that the entity employed a standard recruitment process, which yielded a high calibre of candidates, but the international importance of the role and the impending merger warranted further investigations to find the best suitable candidate. This is because it was found that all the candidates were of a similar level of expertise, and none of them stood out above the rest as the most suitable candidate.
South Africa’s tourism sector was affected by the July lootings on a global scale, as the lootings were widely publicised. This was as exacerbated by the spread of fake news. SA Tourism approached the situation by ensuring that its international partners had accurate information of what was happening on the ground. He explained that South African Tourism also tried to mitigate the situation by shedding a light on some positive news in the aftermath of the lootings, such as the stories on South African solidarity and the clean-up campaigns.
Marketing of Towns, Dorpies and Villages
South Africa is currently under a recession, which means that travel has gone down the priority list for most South Africans. However, in light of this, SA Tourism has begun targeting and marketing local tourism within reach of the community, while investigating how other travel options could be made cheaper. He noted that the tourism recovery plan is a collective effort and will not solely depend on SA Tourism, stating that SA Tourism has collaborated with local tourism offices and municipalities in this regard.
He indicated that the travel confidence from key source markets with high vaccination rates has increased, and that there is an observable increase in flights from the United States, in particular. He said that the greatest challenge is that South Africa is still on the red list of many countries, and SA Tourism is looking to the Committee for guidance in tourism advocacy abroad in this regard.
Global Advocacy Campaign
Mr Guliwe reiterated that SA is on the red list around the world for various reasons. From a marketing perspective, he said that there were barrier issues in some markets, which prevented travel to South Africa; one of the issues highlighted was how crises situations are handled in South Africa. SA Tourism is in consultation with its international partners in this regard.
Mr Guliwe added that SA Tourism had partnered with provincial tourism authorities targeting towns and dorpies successfully in 2020. This will be implemented again in 2021.
There is on-going work with Home Affairs pertaining to VISA’s and South Africa’s international presence, to ensure that South Africa is considered a safe and desirable travel destination.
Ms Dlamini explained that the concerns Members pointed out speak to an annual process mandated by National Treasury, where the entity must declare deficits or surpluses upon receipt of its audit reports. After completing the process, SA Tourism can receive permission to roll over excess funds, which is why the numbers appear not to match.
Ms Amanda Kotze-Nhlapho, Chief Convention Bureau Officer, SA Tourism, stated that there were towns identified to host tourism events. There is also a tourism intensive programme. She also presented that, for the first time in ten years, a South African company has been selected for tourism quality control.
Relationship with the Health Department
Ms Dlamini said that SA Tourism has partnered with the Department of Health in encouraging South Africans to get vaccinated. She added that the changes in the school calendar have also affected domestic tourism. Dlamini also stated that there have been efforts to collaborate with corporates to encourage business travel.
Ms Dlamini explained that one of the greatest challenges to the South African brand has been the emergence of the South African variant, which warranted the need for greater advocacy and inclusion of accurate information about compliance with international norms, standards and vaccine rollout to stem unfounded prejudice against tourism in South Africa.
Ms Dlamini has stated that the entity has engaged with heads of missions abroad to advocate for South African tourism. She emphasised the need to explain with foreign embassies in South Africa to mitigate false information and increase confidence in the South African brand.
Deputy Minister’s Remarks
The Deputy Minister of Tourism, Mr Fish Mahlalela, thanked SA Tourism, and informed the Committee that the Minister was able to attend the meeting due to an emergency. The Deputy Minister informed the Committee that there is collaboration between the Department and the Department of Health. He explained that there is a recovery team that has been instituted to spearhead the endeavour. The Department has decided to review its policy, because there are new developments and some of the policies are outdated – in light of the fourth industrial revolution.
The Deputy Minister explained that there are efforts in place to increase domestic tourism marketing with a strong focus on mitigating COVID19 unemployment. The Ministry has been working on the ground with SMT to ensure that South Africa is ready to receive international tourists.
There is consensus that SA Tourism and Brand SA must be amalgamated, but this has not been finalised yet. There is also concern about appointing a new CEO pre-amalgamation, as there is still no clarity on the new amalgamated entity.
The recovery plan to reposition tourism in the new normal is pending Cabinet approval. He stressed that, to reposition tourism in this way, tourism products need to be developed with dorpies in mind.
Closing Remarks by the Chairperson
The Chairperson thanked SA Tourism and the Deputy Minister for emphasising the importance of tackling rural poverty, which has become the status quo. He suggested that SA Tourism considers introducing village-based tourism indabas. This will aid in increasing the value of tourism in the minds of people living in rural areas, and assist in positioning tourism as a means of alleviating poverty.
The Chairperson thanked Members for their contributions and thanked SA Tourism and the Deputy Minister for their attendance. He said that that the conversation will continue.
The meeting was adjourned.
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