SA Tourism Q3 & 4 2021/22 Performance


06 September 2022
Chairperson: Ms T Mahambehlala (ANC)
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Meeting Summary


South African Tourism (SAT) noted amongst its achievements for Quarter 3 and 4 of 2021/22 that it had exceeded its targets on international and regional tourist arrivals, domestic holiday trips and Rand value of domestic holiday direct spend. The tourism activation at the Dubai World Expo 2020 was also a huge success. The merger of South African Tourism and Brand SA is forging ahead and they currently shared a merged interim board. The appointment of the CEO will happen only once the two have merged. During the discussion the Acting CEO said that SA Tourism is in better shape than it was before lockdown. An important lesson for SAT is that there is still a huge reliance on hybrid systems of operation so in going forward it is accommodating those that are known to thrive in face-to-face platforms but it must continue to drive digital platforms as that expansion would enable them to bring in more diversity and participation.

Committee members asked about the lack of a permanent SAT board; importance of e-Visa progress; grading fees policy review; consequence management from the forensic investigation; domestic tourism negatively affected by scarcity of operating airlines, campaigns in place for domestic tourism especially rural areas; success of SAT/Emirates Airlines marketing campaign; unvaccinated international tourists and lessons learned from Africa Indaba and Meeting Africa and Dubai Expo.

Meeting report

The Chairperson requested the SAT CEO introduce his team before the commencement of the briefing. Apologies were noted from the Minister and Deputy Minister of Tourism

South African Tourism 2021/22 Quarter 3 & 4 Performance
Mr Themba Khumalo, Acting SA Tourism CEO, said that although SAT would present on the items as requested by the Committee, the team was very willing to answer any questions that Members might have. He outlined the key highlights of the Performance Report and gave an overview of the Tourism Sector Recovery Plan. This plan detailed how SA Tourism would recover the tourism sector by reigniting the demand through targeted initiatives and campaigns. There would be strong partnerships with relevant departments to ensure improved travel facilitation through the implementation of e-Visa, improved tourist safety and quicker turnaround times in the processing of tour operator licences. Employment Equity targets were consistently exceeded throughout the reporting period. SA Tourism continued to publish sector performance reports which provided the latest data on the recovery of the sector. The payment of 100% compliant invoices improved from 22 days in Quarter 2 to 12 days in Quarter 4.

Mr Khumalo recalled that the inaugural Global Advocacy Programme Stakeholder Forum engagement was held on 10 February 2022. This Forum resulted in the development of a collaborative programme of action between the public and private sectors to drive the recovery of the tourism sector.

In Programme 3, SA Tourism had exceeded its targets on international and regional tourist arrivals, domestic holiday trips and Rand value of domestic holiday direct spend. The tourism activation at the Dubai World Expo 2020 was also a huge success.

A total of 27 bids were submitted following the implementation of the domestic business events campaign.

In the area of tourist experience, the Net Promoter Score Plan was implemented. In the third quarter, SA Tourism participated in three tradeshow platforms such as the World Tourism Market London, IMEX Africa and IBTM.

Mr Khumalo also presented the timeline of recruitment for senior positions which showed that most shortlisting and offers had been concluded.

The Chairperson thanked the SA Tourism team for its presentation. She commended the CEO and SA Tourism for being progressive and having an executive team where the majority of its members are women.

Ms H Winkler (DA) said that SA Tourism had previously said that the Committee would be introduced to the new Board. She asked for its status and when exactly it was finalised.

Ms Winkler asked if fruitless and wasteful or irregular expenditure had been reported in the last quarter. She asked how the extra revenue accrued via grading fees was spent. She asked if there had been any consequence management following the findings of the forensic investigations into the B2B 'business to business' and B2C 'business to consumer' portals.

Ms Winkler noted that domestic tourism was negatively affected by the scarcity of operating airlines, particularly the Durban-Cape Town and Durban-Johannesburg routes. She asked if SA Tourism had engaged with any stakeholders on this matter.

Ms L Makhubela-Mashele (ANC) asked about the interim SA Tourism Board and the terms of its establishment. The Tourism Act makes mentions a Board, and not necessarily an interim Board. She asked for clarity on the connection between the interim SA Tourism Board and the legislative structure that governs tourism in South Africa for the purposes of educating the Committee. She asked with the intention of understanding the nature of the interim Board and where this information can be found.

Ms Makhubela-Mashele asked what collaborations, programmes and campaigns SA Tourism had put in place in preparation for the upcoming festive season to encourage South Africans to travel and explore the country’s holiday destinations, including ones in rural areas where tourism is not at its highest. Tourism is concentrated in South Africa’s three major cities but spreads out during the festive season due to people visiting their home towns. She asked if SA Tourism had any collaborations or programmes in place with companies in these rural areas to attract tourists.

Lastly, Ms Makhubela-Mashele asked Mr Khumalo about the progress and updates on the e-Visa and the lessons that it can learn about this. She asked if the rolling out of the e-Visa could positively affect tourism in South Africa by making it easier for travellers to come to South Africa. Would the introduction of the e-Visa and its convenience result in South Africa being a highly regarded tourist destination?

Mr M de Freitas (DA) recalled that the presentation stated that grading fees were not received. He asked for clarity on as it was unclear what the problem seemed to be.

Mr de Freitas said that the marketing campaign embarked on by SAT with Emirates airlines was good. He asked if there was a way it could measure the success of this campaign, considering that Emirates has a wide network and is capable of reaching many markets. How can it know if the markets reached by Emirates Airlines react positively to this marketing campaign?

Mr de Freitas asked Mr Khumalo about the Dubai Expo and how they ensure that South Africa is well represented by professionals at the expo. He suggested that persons from the industry or the consulate as it would be futile not be represented by professionals.

Mr de Freitas asked about the SAT Board status and how it is operating in the interim. Is there a deadline for the interim Board to terminate its mandate and how this would affect the decisions currently being made?

Mr de Freitas noted that some countries have turned to a more automated system for issuing of visas and suggested that South Africa investigates this mode of operation.

Mr de Freitas asked how unvaccinated travellers are treated at the moment in comparison to those who are vaccinated.

Ms M Gomba (ANC) noted that the reporting template used was inconsistent with the one previously used. The figures in the previous Committees meeting with the Department of Tourism, were presented in percentages as opposed to the graphs and charts used in the current meeting. This inconsistency would make it hard for the Committee to critically evaluate expenditure. She asked for clear percentages from SAT, especially on underspending so the Committee would have a clear understanding.

Ms Gomba asked how far the policy review process was about free grading that was discussed at the inception of this administration. The Committee was promised that a review of the grading policy was underway. She was concerned that there had been no communication or feedback on this. The Committee had different understanding of this and that the unspent money could have made an impact on all the entities that could not afford grading.  

Ms Gomba asked for clarity about underspending and confusing figures listed under Programmes 1 and 3 in the presentation.

Ms S Maneli (ANC) asked SAT to tell the Committee what they had learnt while hosting Africa Indaba and Meeting Africa under the new norm of living with COVID-19. She asked if SAT had realised tangible results from the activation at the 2020 World Tourism Expo in Dubai. What is SAT doing to ensure the return of establishments whose membership lapsed due to the implementation of the new grading system?

SAT response
Acting CEO Khumalo replied about the SAT CEO and Board appointment and the merger with Brand SA. There had been an announcement on the impending merger with Brand SA. There had been engagements between SAT and Brand SA on this. He and his counterpart at Brand SA had engaged on how they could harmonise the work at their respective organisations. A memo had been drafted and sent to the Presidency and Cabinet for comment. After conclusion on the debate of the memo, the Committee would have a clear understanding of the merger with Brand SA.

Mr Khumalo said that the recruitment of a new CEO was affected by the term of the previous one coming to an end. Minister of Tourism, Ms Lindiwe Sisulu, had not been agreement with the recruitment of a new CEO and wrote back to the company secretary. The appointment will be done in line with the merger between Brand SA and South African Tourism. This would be an opportunity for both entities to come together and choose a CEO that would lead them as a merged entity.

Mr Khumalo said that questions on grading fees would be answered by the Chief Financial Officer.

Mr Khumalo replied about consequence management following forensic investigations into irregular and fruitless expenditure. The executives implicated in the outcome of that investigation went through a consequence management process, some of whom were at board level and the Office of the CEO. That process had been dealt with and concluded. The only outstanding matter is there had been litigation between SAT and the entities affected by the outcome of the forensic investigation and that is in court pending judgment. SAT would be able to come back to the Committee with the final outcome of the consequence management processes after litigation has been concluded.

Mr Khumalo replied about SAT collaborations and campaigns in preparation for the festive season. He had launched the Live Again campaign in February 2022, which is an invitation to South Africans and international tourists to come to South Africa’s holiday destinations. The second phase of the campaign would be in collaboration with content creators, journalists and travellers from all their source markets. He referred to this phase of the campaign as the mega-familiarisation phase. The itineraries they have in place for small towns and rural areas plan to intentionally create a buzz and draw media attention to these small towns that are not usually considered as holiday destinations.

Mr Khumalo said that a lot of the marketing that SAT does is digitally driven. That is done through social media, search engines, trade search engines. This gives SAT clear targets and reach while allowing them to accurately measure the success of all their campaigns on a market by market and period by period basis.

Mr Khumalo said that the Dubai Expo was a six-month campaign and the pavilion built for the expo was led by the Department of Trade, Industry and Competition (DTIC) and could be used by all sectors of government. The pavilion stand could be curated according to the monthly theme of the expo, and the sector of government it would accommodate. The content programme was planned in advance with the assistance of a team based in Dubai. SAT was able to supply the Auditor-General with a portfolio of evidence at the end of the Dubai Expo and that could also be used as indication of success.

Mr Khumalo said that one of the most important lessons SAT has learned is that there is still a huge reliance on hybrid systems of operation regardless of the world slowly returning to a face-to-face environment. What SAT is doing going forward is accommodating those that are known to thrive in face-to-face platforms but SAT must continue to drive digital platforms for those who wish to continue to trade virtually. The expansion of digital platforms would enable them to bring in more buyers, diversity and participation. He added that SAT is in better shape than it was before lockdown.

Ms Nombulelo Guliwe, SAT Chief Financial Officer, addressed the remaining funds that were meant for grading. Treasury regulations prohibited them from transferring funds between programmes. The funds were used in Programme 5 where they used to generate revenue and spent it on assessor capability building. The reason for this was that SAT has not had assessor capability building in more than two years and it was critical to have one to be able to give quality services to their clients. This assessor capability building session allowed them to standardise the grading process and ensure there is a similar understanding of the approved grading procedure.

There were funds received for grading and that there was an over recovery of funds. The reason for that is they had several grading establishments that qualify for the tourism incentive programme. This is a form of financial assistance that stimulates the growth in the tourism sector, specifically privately-owned tourism enterprises. There is predefined criteria that these enterprises need to comply with. The funds given to small privately-owned enterprises are funds given to SAT by the Department of Tourism.

The reason she had emphasised the expenditure slide in Programme 1 was because it was consistent with previous financial information that had been audited. Included in the actual expenditure on the slide, was both cash and non-cash items. The reason for the inclusion of these items was SAT had to comply with the accounting standards that regulate their finances.

Ms Guliwe noted that the 15% in question was more than the budget because of non-cash items included in the expenditure. Included in the expenditure was amortisation and depreciation expenditure. Foreign exchange rates were part of the losses that were incurred. The impact of converting several currencies in to South African Rands while consolidating all their books also negatively affected their revenue and had to be accounted for.

Ms Nomasonto Ndlovu, SAT Chief Operating Officer, replied about how the less visited areas would be highlighted in marketing campaigns, saying that SAT was also partnering with provincial tourism authorities to help them unearth new tourism destinations in these rural areas and small towns. The Nigerian tourism road show that SAT recently hosted, enabled 25 SMMEs who specialise in hidden gem tourist destinations to showcase some of the best hidden holiday destinations.

Ms Ndlovu shared a case study with the Committee, where the launch of the e-Visa system was evaluated in Nigeria. The system would no longer require people to travel to the capital city of Abuja to have their documents processed. There had been glitches in the system, one being travellers not having access to certain information. However, travellers were happy that this new system allowed them to see the verdict of their application online without having to drive to a physical office. e-Visas would remain a Home Affairs project but SAT would continue to have engagements with the department to ensure that travellers have more convenient experiences.

Mr Khumalo replied that there had been no fruitless and wasteful or irregular expenditure in Quarter 4 and that everything had been accounted for.

Mr Khumalo replied that SAT had been in engagement with domestic airline partners. Several factors had negatively affected the capacity of domestic airlifts. The war between Russia and Ukraine had been one of the many factors. SAT had also been in engagements with African airlines at the Cape Town summit about airlifts and would continue to engage with several other partners.

Draft Committee Programme
The draft programme was presented. It was suggested that the Committee engage the Department of Transport and the South African Police Service about the matter of long-distance buses.

The following proposals and comments were made:
- The Committee’s Tourism Summit be extended to a full day.
- Friday 23 and Friday 30 September be considered as options for the Tourism Summit.
- The request to go to Kenya on the international study tour could not be fulfilled as Kenya had recently held elections and was busy with the establishment of a new administration. France was listed as an alternative amongst other options. The Committee was requested to confirm France as the alternative destination of the Committee’s international study tour.

The Chairperson said that Friday 30 September was a more suitable date for the Summit as this would allow Committee members to make changes to their diaries.

The Chairperson proposed that the Committee look into having two countries as options for the Committee study tour destinations, as opposed to having one option. This would also give the House Chairperson an alternative option to choose from.

Mr de Freitas proposed that the Tourism Summit be split into two days instead of one. He noted that France was on the list of countries considered for the study tour and asked if the Committee was committed to making changes to this.

Mr de Freitas said spending time in Paris as per the Committee’s schedule would be interesting but also suggested that the Committee spend some time in small towns outside of Paris to see how their tourist strategies could be incorporated in the South African tourism industry.

The Chairperson said that the study tour programme had not been tabled to the Committee. The Committee needed to agree on the date and the country. The Committee Secretary had said why Kenya could not be chosen as a study tour destination and asked to elaborate on this.

The Committee Secretary replied that the Committee named three countries as possible study tour destinations: Kenya, France and the United States of America. The Committee had not been aware that Kenya was in the process of welcoming a new administration. The elections processes hindered the Committee from going to Kenya. The Committee had agreed to go to its alternative option, France.

Ms Makhubela raised a concern on the Friday dates proposed for the tourism summit as that day was dedicated for other matters. She suggested that the Committee ask for an exemption from the plenary session to allow the Committee to have a full day for the summit as opposed to Friday.

Ms Gomba noted that there had been a problem about the Committee’s planned study tour. The Committee had agreed to stop over in Kenya, on their way to Paris. She asked how it was decided that the Committee would go to Paris instead of both Kenya and France. More discourse on this matter was delaying the trip.

The Chairperson reiterated that a trip to Paris via Kenya would be impossible because Kenya is in the process of inducting a new administration.

Ms Manelisi asked the Chairperson to remind the Committee of the third country that was an alternative to Kenya.

The Committee Secretary replied that the third option was the United States of America.

Mr de Freitas proposed that the Committee meet on 28 September as many of the Committee members would be in Cape Town. He asked if the Committee would be able to consider other African countries for the study tour.

The Chairperson thanked Committee members for attending and said the two alternative countries for the Committee study tour would be submitted to the House Chair.

Meeting was adjourned.

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