ATC171115: Report of the Portfolio Committee on Tourism on first Quarter (Q1) Performance Report for the 2017/18 Financial Year, dated 15 November 2017



The Portfolio Committee on Tourism, having considered the 2017/18 First Quarter Performance (Q1) Reports of the National Department of Tourism on the 20th October and South African Tourism on the 27th October 2017, reports as follows:


  1. Introduction

The performance of the Department in the first quarter of 2017/18 raises some concerns on the financial and non-financial performance. The departmental performance in the previous financial year incurred underspending of R89 million and expenditure was not commensurate to the achievement of predetermined objectives. The quarter one performance is starting to depict this trend as 39 percent of the allocated budget has already been spent but only 77.74 percent of targets were achieved. The concern was more on Programme 3: Destination Development and Programme 4: Tourism Sector Support services. The Committee will pay more attention on the expenditure and performance of these two programmes.

The marketing entity of the Department, South African Tourism (SAT), reported under five Programmes for the first time in the period under review. This is the improvement induced by the Committee in terms of SAT improving on its Annual Performance Plan and complying with the SMART principles of reporting. This has assisted in grouping the activities of the Entity and allocating budget to specific Programmes for better financial reporting.

The expenditure is not commensurate with performance against predetermined objectives as 32 percent of the budget has been spent to achieve 59 percent of the targets.  The ideal performance for the quarter would have been 25 percent of the budget spent to achieve 100 percent of the targets for the quarter. The challenge was mainly on Programme 3: Leisure Tourism Marketing; and Programme 5: Visitor Experience. The Committee, going forward will pay special attention to these two Programmes.


  1. Linking budget expenditure to service delivery

The Department has R2, 140,156, 000 as appropriated in the Estimates of National Expenditure for 2017/18 and was able to spend R853, 437,000 accounting for 40 percent of the budget.  There are huge variations in the expenditure for each Programme. Table 1 depicts the quarterly expenditure against the appropriated annual budget.

Programme 1 spent R44.2 million of its appropriated R219.1million, accounting for 20 percent expenditure. In the quarter under review, the Department spent R70.4 million on compensation of employees from a projected spending of R24.0 million, the R46.4 million higher than projected expenditure was due department being over the projected headcount. The department ‘s targeted headcount for the quarter was 489, and the actual headcount at the end of the quarter was 511, which is over the target by 22 positions.

In Programme 2: Tourism Policy and Planning, the Department spent R687.34 million of its R1.2 billion appropriated for the Programme. This represents 57 percent expenditure of the allocated budget for the financial year.

Table 1: Appropriation and first quarter expenditure for 2017/18



Main appropriation

Available Budget

Q1 Expenditure

Expenditure as % of available budget

Q1 Projected expenditure

Variance from projected expenditure

% variance from projected expenditure








Corporate Management

   219 094

   219 094

44 236


  51 861

7 625


Tourism, Policy, Research and International Relations

1 208 708

1 208 708

687 345


686 895



Destination Development

   443 953

   443 953

56 076


 92 255

36 179


Tourism Sector  Support Services

   268 401

   268 401

65 780


 51 952

-13 828



2 140 156

2 140 156

853 437


882 963

29 526


Source: Adapted from National Treasury 2017/18 1st Quarter Expenditure Report

In Programme 3:  Destination Development, expenditure was R56.1 million, representing R36.2 million or 39.2 per cent lower than the projections for the period due to payments relating to the EPWP programme not made as there was a delay in receiving the proper documentation from project implementing agencies. Delays in receiving the proper documentation point to poor project management as submission of these documents should be included in the deliverables in the project pipeline. The concern is that the Department continues to experience challenges with EPWP projects which may culminate in non-achievement of the Full-Time Equivalent jobs at the end of the financial year. This should be resolved early by the Department to avoid under expenditure as incurred in the 2016/17 financial year. 

In Programme 4: Enterprise and Visitor Support Services, expenditure was R65.8 million of its R268.4 million appropriated budget for the year, representing 25 percent expenditure. In this Programme, the Department spent R13.8 million or 26.6 per cent higher than the projections for the period due to the large payment for Tourism Incentive Programme that was processed in April 2017 due to the outstanding agreement that was only signed late in the 2016/17 financial year by the beneficiary. The higher expenditure in the Tourism Incentive Programme is encouraging given that the Department struggled to spend funds in this programme. However, the Department should provide more explanation of this higher expenditure.


  1. Performance against projected quarterly expenditure

The Department failed to meet its quarterly expenditure targets in two of its Programmes. If this continues throughout the financial year, the Department may incur underspending at the end of the financial year. In Programme 1 the projected expenditure was R51. 9 million, but the actual expenditure was R44. 2 million, with a total of R7.6 million unspent budget accounting for 14.7 percent under expenditure. In Programme 2 the projected quarterly expenditure was R686.9 million and the actual expenditure was at R687.3 million, accounting for R450 000 over expenditure, which is a variance of -0.1 percent. In Programme 3 the projected expenditure was R92.3 million, but the actual expenditure was R56.0 million, accounting for R36.2 million under expenditure which is a variance of 39 percent. Last, in Programme 4 the projected quarterly expenditure was at R51.9 million, but the actual expenditure was R65.8 million, accounting for R13.8 million over expenditure with a variance of -26.6 percent.


  1. Achievement of predetermined objectives

In the first quarter of 2017/18 the Department had planned to pursue 69 predetermined objectives but only 56 were achieved.  Table 2 depicts the departmental quarterly performance against the Annual Performance Plan.

Table2: Achievement of pre-determined objectives


Number of targets


Not achieved

% achieved

% not achieved

Corporate Management






Tourism, Policy, Research and International Relations






Destination Development






Tourism Sector  Support Services












Source: Adapted from NDT 2017/18 Quarter 1 Report

This indicates that the Department achieved only 77.74 percent of its predetermined objectives and incurred underperformance of 22.26 percent. The performance of the Department in the first quarter of 2017/8 is a cause for concern, particularly with Programme 3 and Programme 4 which are mainly service delivery Programmes.


  1. Programme Performance

5.1        Programme 1: Administration

Programme 1 had 17 targets and 13 were achieved accounting for 76.4 percent performance.

  • With regard to the number of strategic documents developed, the organisational performance management guidelines for 2017/18 reviewed; the fourth-quarter performance reports for 2016/17 were submitted to DPME; the 2016/17 Performance information for Annual Report was submitted to AGSA on 31 May 2017; the fourth-quarter risk analysis report for 2016/17 was prepared for adoption by the Risk Management Committee (RMC). Adoption however, was dependent on RMC meeting, which was postponed to 25 July 2017 as a result of the finalisation of the appointment of the RMC Chairperson. Interviews were conducted on 24 April 2017 and 22 May 2017.


  • The number of public entity oversight reports prepared, the SAT quarterly oversight report prepared. On vacancy rate the target is for the vacancy rate not to exceed 8 percent. The target was not achieved as the Vacancy rate as at 30 June 2017 was at 14,8 percent. The reason for the variance is that the Department has more than doubled the number of vacancies on its establishment following the restructuring process of which the migration ended in April 2017. This also resulted in the Department having many employees additional to the establishment. However, a bulk internal recruitment drive has since commenced with all posts advertised, captured and the first set of short listings per Branch took place in June 2017. The Committee has to monitor the process to ensure that the vacancy rate has stabilised by the end of the financial year.


  • With regard to the percentage women representation in senior management service (SMS), representation for people with disabilities, and black representation, women representation at SMS level was maintained at 54.4 above the target of 50 percent; people with disability representation were maintained at 4.5 percent above the target of 3 percent; black representation was maintained at 95.5 percent above the target of 91.5 percent.


  • With regard to the development and percentage implementation of Workplace Skills Plan (WSP) with targeted training interventions the quarterly target was the Development and 25 percent implementation of the WSP. Three (3) Skills Programmes which constitute 25 percent of WSP were developed and implemented. These were a) the development and submission of Work Skills Plan to PSETA, b) two (2) skills programmes facilitated, and c) coordination of Compulsory Induction Programme in line with National School of Government schedule. The costs of rolling out the WSP are derived from 1 percent of the personnel budget (R2, 096 320, 00) as per the Skills Development Act, and paid to SETAs as levy fee.


  • The percentage compliance with prescripts on management of labour relations matters, 100 percent compliance in the management and handling of grievances, misconduct, disputes and collective bargaining in terms of two grievances; 2 cases of misconduct; two cases of arbitration; one matter in court; one matter on Departmental Bargaining Chamber; and there were no matters with regard to conciliation and appeals.


  • The number of quarterly and annual financial statements compiled and submitted; third-quarter interim financial statements were compiled and submitted to the National Treasury. On the percentage implementation of the annual internal audit plan, the quarterly target was 30 percent implementation of the annual internal audit plan, but only 7.5 percent of the annual internal audit plan implemented. Non-achievement was due to a delay in the development of the Audit Plan due to the late finalisation of the Risk Register as a result of the restructuring process.


  • The percentage implementation of the communication strategy (media engagement, branding, events management, internal and intergovernmental communications and community engagements /izimbizo, the quarterly target was 100 percent implementation of the Q1 requirements of the annual implementation plan of the Department’s communication strategy. This was achieved through the production of Corporate Identity, Branding and Events Plan for 2017/18; production of corporate and promotional memorabilia plan; production and distribution of stakeholder publications; production and distribution of three monthly newsletters; production and distribution of 2017/18 APP; monthly analytical reports on social media presence, web portal and intranet; izimbizo’s; and departmental Quarterly Media Report (April to June).


  • The amendments to the Tourism Act to be drafted, the quarterly target was the consultation with Cabinet Clusters on the draft Amendment Bill. The Department failed to conduct the consultation as the Department identified the need to study the impact of the sharing economy on tourism for possible policy stance and amendment of the legislation. Consultation with stakeholders and role players to determine a policy position with regard to the sharing economy was conducted in the 1st quarter. Achievement of this quarterly milestone was dependent on consultation with stakeholders for the determination of a policy stance on the sharing economy, which was not processed. The delays, though justified, are a cause for concern since the time of tabling the Bill to Parliament keep shifting.


  • On the percentage procurement from B-BBEE compliant businesses, 100 percent procurement from B-BBEE compliant businesses was achieved as planned.


5.2        Programme 2: Tourism, Research, Policy and International Relations

  • On a number of platforms facilitated to improve tourism-sector stakeholder engagement and NTSS implementation, logistical arrangements for the National Tourism Stakeholders Forum (NTSF) meeting were finalised; the concept document for the public lecture was developed; and the report on the 2016/17 National Tourism Research Seminar was developed.


  • The number of policy bulletins developed, the proactive tracking of policy developments was done as planned.


  • The number of policy bulletins developed, the report on the identification and analysis of international policy practices on the sharing economy was developed and approved.


  • With regard to the number of monitoring and evaluation reports on tourism projects and initiatives developed, the 2015/16 State of Tourism Report was not published. However, the report was developed. The reason for the variance was that new data became available and the Department decided to update the document with the latest information; the framework for the evaluation of the Tourism Incentive Programme (Market Access Incentive) has been developed and completed.  The framework was developed using documents from project owners and other documents sourced from the internet; the framework for the 2016/17 National Tourism Sector Strategy (NTSS) implementation report was reviewed and stakeholders consulted.



  • The number of information systems and frameworks developed and maintained, Benchmarking and analysis of the NTIMS requirements have been conducted. The Benchmarking and Analysis Report was concluded; training gaps and need in data capturers have been identified; and a report on the two maintained mobile applications has been developed. These Apps are exclusive to communicating, promoting and disseminating tourist guide and visitor information centers (VICs) database and information. These relate to Visitor Information Centre Application (VIC) and Tourist Guide Mobile Application.


  • The number of initiatives facilitated in multilateral fora, internal stakeholder consultation was conducted as the plan will have an impact on the other Branches of the Department as implementers. These consultations are part of a process that will culminate in the development of a draft plan for hosting of a Tourism Work Stream during the 2018/19 BRICS Summit. The current BRICS structure does not have a tourism work stream, and this restricts the tourism sectors of the BRICS countries to address tourism related issues and derive potential benefits; and a draft plan for hosting of Tourism Work-stream during South Africa’s chairpersonship of IORA was developed.


  • The number of initiatives facilitated for regional integration, Indaba Ministerial Session 2017 was hosted on 15 May 2017; and Mpumalanga and North West Provinces were consulted regarding the hosting of the Best Practices Workshop.

5.3        Programme 3: Destination Development

  • The number of destination enhancement initiatives implemented, implementation Progress Reports were completed for four destination enhancement initiatives as follows: (1) Shangoni Gate and (2) Phalaborwa Wild Activity Hub in the Kruger National Park, (3) National Heritage Monument tourism development and (4) Interpretive signage at four National Heritage sites. (SANParks-Kgalagadi Transfrontier Park, Golden Gate National Park; Gugulethu Seven Memorial, and Sarah Baartman Heritage Site.) Some of these projects are recurring from the 2016/17 financial year and the Department should provide a comprehensive progress report on implementation; Monitoring of the implementation of the Blue Flag Programme at existing 50 beaches was completed, and a total of 191 Beach Stewards were trained on Module 2 of Environmental Educators Training & Development Programme (EETP) at 50 beaches; the concept document and business case for the Indi-Atlantic Route has been developed. The Department should provide more information on the Indie-Atlantic Route; the appointment of service provider to conduct demand and supply analysis was not completed. However, the Terms of Reference were finalised and approved. The variance was due to this being a new area of work and there were delays in processing the Terms of Reference through the Bid Specification Committee (BSC). More than one meeting of the BSC had to be convened; the procurement for the Destination Planning   Manual has not been finalised as planned. However, the Terms of Reference for the appointment of a Service Provider to develop the destination planning manual was drafted and approved. The service provider has however not been appointed yet; and the procurement for the Methodology for the development of tourism precincts has not been finalised as planned. The Terms of Reference for the appointment of Service Provider to develop the methodology for the development of tourism precincts was drafted and approved. The service provider has however not been appointed yet.


  • Number of Working for Tourism projects funded through EPWP, Satisfactory progress reports were provided. However, there were no payments requested as the projects still had funds in their accounts; monitoring of the implementation of projects in the Northern Cape - (Platfontein Game Farm) and Limpopo (Phiphidi Waterfall) were completed. The variance was due to the North West (NW) Letlamoreng Dam having no need for monitoring visits as the project files were submitted to GTAC for technical evaluation and project advice.


  • The number of full-time equivalent jobs (FTE) created through Working for Tourism programme per year, the target was overachieved with 835 FTE jobs created through Working for Tourism programme more that the planned 463 for the quarter. The variance was due to advanced planning and having the correct mix of high labour intensive projects at the beginning of the financial year which led to more FTE jobs being created. This performance is commendable given that the Department failed to achieve this target in the previous financial year.


  1. Programme 4: Tourism Sector Support Services


  • The number of initiatives supported to promote B-BBEE implementation, the Terms of reference for the monitoring on the implementation of the amended tourism B-BBEE sector code were developed and approved. The Terms of reference are for the appointment of a Service Provider to conduct a survey in the tourism sector to assess the level of compliance by tourism enterprises with the tourism B-BBEE sector code; the Draft Tourism Transformation Indaba concept document and draft programme were developed; the report on the status quo for commercialisation of state-owned attractions developed; and the National Empowerment Fund (NEF) was identified and meetings were held to establish a partnership. The partnership with NEF is the beginning of the innovative thinking that the Committee has been calling for with regard to high B-BBEE programmes.


  • The number of social tourism initiatives undertaken, the information workshops were not hosted. However, in preparation of the workshops, consultation meetings were held during Indaba with KwaZulu-Natal, Limpopo, Northern Cape, North West and the Western Cape provinces. The variance was due to that it was not possible to have the information workshops held in Quarter 1 as the Department’s Business Plan finalisation and internal Performance Agreements according to the new organisational structure took longer; the Situational analysis of social tourism schemes was done and a social tourism scheme concept document was developed. This is an initiative of the Department to address the gaps identified in the Domestic Tourism Growth Strategy, which include access, affordability, seasonality and uneven geographic spread with an aim to encourage a culture of travel among South Africans. This is a good initiative given the clarion call made by the Committee to address access, affordability, seasonality and uneven geographic spread for the domestic market.


  • The implementation of the enterprise development programme; the needs assessment was conducted. Orientation workshops were conducted in all nine provinces; and the Stakeholder engagement on current SMME policy pronouncements was conducted on 9 June 2017 at the SEDA Head office in Hatfield Pretoria.


  • On the number of Incubators implemented, 2 existing incubators (Pilanesberg and Manyeleti) were supported; one rural tourism node incubator outreach was done. One rural initial needs assessment site visit was conducted in Mier and Upington-Northern Cape; Pilgrims Rest- Mpumalanga and Phalaborwa- Limpopo. The reason for the variance for additional nodes is that the Department is conducting feasibility studies for an additional incubator to be set up in the current financial year. Studies were done in the Northern Cape (Mier and Upington), Mpumalanga (Pilgrims Rest hub), Limpopo (Phalaborwa), and North West Province (Madikwe). This is good proactive planning which will lead to seamless implementation and eliminate a number of delays as experienced in some departmental programmes before.


  • The number of priority areas to support the implementation of Responsible Tourism, the quarterly target was the implementation report covering new and existing programmes funded through TIP for market access, tourism grading, energy-efficiency, and universal accessibility (pilot). Implementation report covering new and existing programmes funded through TIP was developed and finalised. The report covers progress on the development and implementation of programmes and support related to market access, tourism grading, energy efficiency, the pilot initiative on universal accessibility and other initiatives.


  • The number of priority areas to support the implementation of Responsible Tourism, the concept document providing a rationale for the implementation of the project of development and support of five (5) Community Tourism enterprises to enter the tourism value chain has been developed.


  • The number of initiatives for improving visitor services implemented, Tourist Guides Registers' workshop was conducted on  1-2 June 2017 and status of Provincial Registers was developed; the Terms of Reference for the appointment of Service Provider to produce and print tourist guides identification cards with security features were developed; two Operational and Enhancement Reports were developed for approval for  ORTIA NTIG and  KSIA NTIG; the CTIA stakeholder engagement discussed the gateway model. The decision was taken to have a broader consultation forum to discuss the new way of establishing and managing visitor centres. During the 2017 Tourism Indaba the following provinces were consulted: Eastern Cape, Gauteng, Northern Cape, North West and KwaZulu-Natal. A report was developed; and the Quarterly report on tourism complaints received for the 1st Quarter was developed. There were twelve (12) complaints received; 11 were domestic and one (1) was international.


  • The number of capacity-building programmes implemented, Chefs Training Programme (CTP) targeting 577 trainees was implemented. The training of all chef learners was completed. A total of 570 learners qualified to sit for the final exams at the end of April and the beginning of May 2017. The results had been received and 518 learners were to graduate in July and August 2017. Of these, 129 passed with distinction, 215 received merits, and 2 learners were absent for their exams Mpumalanga and Gauteng (Vaal); on the Sommelier training course implemented, there was recruitment and training of 297 learners which commenced in Western Cape, KZN and Gauteng. Stakeholder engagements were conducted in four provinces i.e. Western Cape, KZN, Gauteng and Northern Cape. Training commenced in Western Cape (150), KZN (87), Gauteng (30) and Northern Cape (30). The reason for variance was the outstanding 3 learners were yet to be recruited from KZN; Hospitality service training programme was implemented in six provinces (Gauteng (230, Mpumalanga (350), Eastern Cape (114), KZN (568), Western Cape (575) and Northern Cape (118)); Food Safety Programme was implemented in 8 provinces. Recruitment was done in 8 provinces, excluding NC due to lack of response from Provincial stakeholders. 476 learners have been enrolled to date, of which 403 are women. First Project Advisory Committee meeting was held in Cape Town on 16 May 2017. Classroom monitoring visits were conducted in Limpopo, North West, Gauteng and Mpumalanga. The reason for the variance was that Northern Cape (NC) was no longer interested in participating due to lack of interest shown in the programme even after advertising; a working group constituting of key stakeholders to inform the development of a concept for governance structures and institutional arrangement was established. The first meeting for the group was scheduled for 19 July 2017; stakeholder engagements on tourism induction programme concept and implementation plan in the identified rural areas were conducted; NTCE 2017 project plan was developed and is in place; NTCE 2017 project plan was developed and is in place. The variance was caused by discussions to reach concurrence with the implementing partners were still ongoing in order to finalise the recruitment and selection process of the 20 new black to be trained at an institution of higher learning; needs analysis for two tourist guiding skills development programmes were identified and implemented for up-skilling of existing tourist guides at WHS (Mapungubwe and uKhahlamba) and training of new entrants in adventure guiding; and  the recruitment and selection of 60 trainees (20 per quarter) was not finalised. However, the selection criteria had been developed and the training schedule was developed with the National Cleaner Production Centre (NCPC). The reason for the variance was the late finalisation of the procurement process delayed the recruitment and selection.


  1. South African Tourism

Organisational Performance Results for Quarter 1 for 2017/18. The analysis of performance per programme for the quarter reflected the following results:


6.1        Programme 1: Corporate Support

In the quarter under review SAT set 2 targets for quarter 1 under Programme 1and both targets were achieved. This accounts for 100 percent achievement of targets in Programme 1.

  • The percentage of staff migration from old to new structure was set at 30 percent for the 1st quarter and it was overachieved by 90 percent.
  • SAT planned to make a submission of the Annual Financial Statements, Performance Information Report and Corporate Governance Report to the Auditor General, National Treasury and National Department of Tourism. This target was achieved as the Annual Financial Statements, Annual Performance Information Report and Corporate Governance report were submitted to AGSA, National Treasury and NDT on in line with statutory requirements.


6.2        Programme 2: Business Enablement

SAT set 5 targets for Programme 2 in the quarter under review. All the targets were achieved. This accounts for 100 percent achievement.

  • SAT set a target to develop improvement plans for areas that require improvement. This target was achieved as the stakeholder satisfaction survey was conducted in June/July 2017 in order to set a baseline score and the results of the stakeholder satisfaction survey will be tabled in quarter 2. 
  • Three trade webinars were planned to be conducted in quarter 1. This target was achieved, as three webinars were held in April, May and June 2017.
  • A target to produce the draft Tourism Growth Strategy was set for the quarter. The target was achieved as the draft Tourism Growth Strategy has been completed and approved by Exco.
  • SAT set a target to produce a first draft of 2016/17 Annual Report including Annual Financial Statements and Quarter 4 Performance Report. The target was achieved as the first draft of the 2016/17 Annual Report was approved by the Board and the Quarter 4 Performance Report was approved and submitted to NDT and AGSA on the 31st January 2017 in line with the statutory requirements.
  • A target to develop the 2016/17 quarter 4 Tourism industry performance analysis report was planned. This target was achieved as the quarter 4 report has been consolidated with the annual report.


6.3        Programme 3: Leisure Tourism Marketing

Programme 3 had 10 targets in quarter 1, but only 3 of the targets were achieved, accounting for 30 percent achievement. A total of 7 targets was not achieved, which accounts for 70 percent underachievement.

  • A target of 2.7 million international tourist arrivals for quarter 1 was set, and 2.6 million was achieved. This target was underachieved and the reason for underachievement was mainly driven by an 8.4 percent (164 803) decline in Africa Land markets. A total of 2.5 million international tourist arrivals was set under financial year and was underachieved at 2.4 million.
  • A total tourist foreign direct spend was set at R19.6 billion for quarter 1 under calendar year and R19.0 billion was achieved. This target was not achieved due to the decrease in average spend in addition to the decline in the number of arrivals that had an impact on the achievement of targets. A target of R19.6 billion for quarter 1 under financial year was set, but underachieved at R17.6 billion.


  • The target for developing methodology for target setting for the percentage geographical spread of international tourist arrivals achieved was set for the quarter under review. This target was achieved as the methodology for target-setting was developed in June 2017 and specific achievement targets will be set for each province in quarter 2.


  • A target for developing methodology for target setting for percentage seasonality for international tourist arrivals was set for the quarter. The target was not achieved as the work was still underway to develop the methodology and revised timeline for completion of this target is quarter 4.


  • A target of 6.1 million for the number of total domestic trips under calendar year and 5.6 million under financial year were recorded at 4.4 million and 4.8 million respectively. These targets were underachieved due to the decrease in Visiting Friends and Relatives (VRF) trips from a constrained economy with limited disposable income due to job losses; and no Easter tourist related activities as the Easter period was in April.


  • A target of 712 760 under calendar year and 800 000 trips under a financial year for a number of domestic holidays trips were overachieved at 989 000 and 722 000 respectively. The reasons for a significant increase in the percentage share of holiday trips was due to SA Tourism’s targeted efforts to promote value for money deals.


  • SAT set a target of R6.1 billion for Total Domestic Direct Spend under Calendar year and this was underachieved at R5.4 billion. A total of R6.2 billion was set for the financial year and was achieved at R6.4 billion.


  • A target of domestic holiday revenue was set at R1.5 billion for calendar year and R1.9 billion for the financial year. The targets were achieved at R 2.2 billion and R1.9 billion respectively. The increase was mainly driven by the increase by the increase in holiday trips and the increase in the average holiday spend per trip per day.


6.4        Programme 4: Business Events

In the quarter under review SAT set 6 targets in Programme 4. A total of 3 were due for reporting in Quarter 1, and all were achieved, accounting for 100 percent achievement.

  • A target of 16 was set for the number of bids supported for international and regional business for quarter 1. This was over achieved by 26.


  • Tourism Indaba was targeted under the number of market access platforms that SAT manages. This target was achieved as the Tourism Indaba was delivered on time from 16-18 May 2017 and within budget.
  • SAT set a target of 1 international tourism market access platforms where South Africa participates. This target was achieved as South Africa participated in in IMEX Frankfurt in May 2017.

6.5        Programme 5: Tourist Experience

In the Quarter under review SAT had 2 planned for two targets and failed to achieve both targets. This accounts for 100 percent under performance.

  • A total of 1 376 was set as a target for a number of graded accommodation establishments, but 1 190 was achieved.  This underachievement was due to 320 cancellations in quarter one.


  • A target of number of graded rooms was set at 29 888 and 27294 was achieved. This target was not achieved due to 320 cancellations of establishments in Quarter 1 consisting of 4 319 rooms. Of the 320 establishments cancelled, 20 were hotels. This accounted for 28 percent of the total room cancellations. Three of the larger hotel groups have subsequently re-applied for grading.


  1. Budget and Actual Expenditure as at 30th June 2017

South African Tourism receives their budget from a number of revenue streams. The total annual budget for the SAT in 2017/18 financial year is R1.4 billion. This comprises of R1.3 billion, which is a grant from the National Department of Tourism; R124.6 million from Tomsa levies; R63.4 million from Indaba and Meetings Africa; R21.3 million from grading fees; and R20milion from sundry revenue.

South African Tourism had planned to spend R419.9 million in Quarter 1 of 2017/18 financial year. The Entity incurred over expenditure as R435.3 million was spent accounting for 32 percent expenditure in the first term. The expenditure per Programme is as follows:

  • In Programme 1 - an 11 percent variance in over expenditure was mainly due to non-cash accounting entries such as depreciation and amortisation.


  • In Programme 2 - a 22 percent over expenditure variance was due to upfront investments in strategic research and insights projects.


  • In Programme 3 - a 4 percent over expenditure variance is due to marketing production and media buy upfront payments. R22.5 mil included in Leisure Tourism Marketing relates to domestic marketing expenditure.


  • In Programme 4 - a 3 percent over expenditure variance was due to nature of NBC subvention funding and bid support, which are committed upfront and based on opportunities which arise.


  • In Programme 5 - underspending was incurred as TGCSA planned much of spending around the marketing and socialisation of the new grading criteria. This can only be done once approval of new grading criteria has been granted. Approval expected in quarter 2.


  1. Human Capital


The workforce profile for South African tourism at the end of the reporting time is reflected, against an approved headcount of 202. The Entity has achieved a vacancy rate of 15.8 percent due to the organisational redesign process (Project Ignite). The internships and contract employees were used to ensure business continuity. The recruitment for vacancies commenced in June 2017 and this is progressing well. 


  1. Committee observations

The Committee made a number of observations with regard to2017/18 first quarter performance as follows:

9.1        Membership of international organisations

The Committee observed that the Department transfers funds to a number international and regional organisations. The challenge was with the value for money impacts of this membership to South Africa. What is clear though is that the bi-lateral agreements are beneficial for the country. Through bilateral agreements, for example, in the Robben Island Museum there is now an interpreter on Mandarin; there are South African in Seychelles being trained as chefs, and in other countries. These are national efforts to contribute to tourism development and growth.  The BRICS membership has also opened opportunities for more collaborations. The member states declared tourism as a strategic sector to grow the economies of these countries.  However, the Department indicated that when the BRICS structures were established, there was no work done for tourism stream. At this stage this structure is a lobbying exercise. Therefore, relationships with other countries are critical and have an impact on coordinating tourism activities.


9.2        Safety and security for tourists

The Committee raised concerns about the growing trend of crimes committed against tourists. This is exacerbated by targeted follow home attacks at the OR Tambo International airport. The Committee commended the Department, South African Tourism, and the Minister of Police on the swift action when the 36 Dutch tourists were ambushed and robbed of their luggage, including their travel documents. These tourists were going to spend 22 days in South Africa and their spending was going to inject much needed capital to our struggling economy.


9.3        Dual and dynamic pricing

The Committee commends the increase in the domestic tourism trips. However, this increase is minimal given the potential of South African to travel within their own country. The Committee is of the view that there is a need for price differentiation charges for local and international tourists through dual pricing and dynamic pricing mechanisms. This may include specific periods where people are encouraged to access cultural and heritage attractions at a reduced price. Local heritage sites have to be accessible and affordable. However, the Department is of the view that this is a policy issue. In addition, South Africa, has sufficient variety of products for a wide range of consumers. There are brands, for example, where a family of four can be accommodated at a reasonable price. Dual pricing is already applied in other products, including some government owned products. The issue that needs to be looked at is the impact of this policy.  


  1. E-Visas

The Committee was concerned about the slow pace of exploring E-Visas to facilitate tourist travel. The Department indicated that they work closely with the Department of Home Affairs and that E Visas will be implemented as a pilot in 2018. However, details of this pilot phase are scanty at the moment.



  1. Incentives on Tourism Grading Council


The Committee was concerned that the level of take up for the Tourism Incentive Programme (TIP) meant for grading and marketing support remains very low. The Committee insisted that the quality of the grading services rendered must not be lowered. Instead, South African Tourism and the Depart should ensure that more awareness programmes for the TIP support should be done to increase the number of enrolled establishments.



  1. Working for Tourism infrastructure projects


The Committee noted that the Working for Tourism infrastructure projects, which are the departmental Expanded Public Works Programme (EPWP) implementation continues to be a challenge.  The Department conceded that EPWP projects continue to be a serious challenge to implement. Therefore, continuous modalities in these projects must come into play, and this is the reason the Department undertook the GTAC process. This process meant to get project implementation right from the start. 


9.7        Project reprioritisation

 The Committee was concerned how the Department had funded the projects that were already commissioned in the 2016/17 financial year given that the National Treasury refused grant permission to rollover the funds. The Department indicated that they factored two possibilities when they developed the 2017/18 Annual Performance Pan. These were scenarios where National Treasury would have approved the rollover and the other where the rollover was rejected. Reprioritisation has been made on the Tourism Incentive Programme Transfer to South African Tourism, and transfers to the Industrial Development Corporation to fund committed projects.


  1. Recommendations

After considering the 2017/18 first quarter reports for both the National Department of Tourism and South African Tourism, and the current external factors, the Committee recommends that the Minister of Tourism:

10.1      Ensures that the Department spends their quarterly budget according to the quarterly projections to prevent underspending at the end of the financial year.

10.2      The Department ensures value for money for all the international membership engagements, and updates the Committee on all active bilateral arrangements.

10.3      The Department engages the private sector and government entities who own and operate tourism attractions, and consider a policy framework on dual pricing and dynamic pricing mechanisms.

10.4      The Department continues to engage the Department of Home Affairs in facilitating tourist travel, including the proposed E-Visa regime to be piloted from March 2018.

10.5      Ensures that South African Tourism conducts an awareness campaign for the Tourism Incentive Programme to popularise it amongst qualifying establishments with an aim of increasing the uptake of the incentives.


  1. Conclusion

The Committee is satisfied with the 2017/18 first quarter performance for both the Department of Tourism and South African Tourism.  The Department is urged to pay attention on the areas raised as concerns by the Committee. These, amongst others, include tracking and eliminating under expenditure; improving the planning and implementation of Working for Tourism projects; working with other government departments and the private sector to deal with crime against tourists; and considering policy implications for introducing dual pricing and dynamic pricing mechanisms.


Report to be considered






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